Minimum wage increase worth the hassle?

Holly McCauley

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So Arkansans have raised all sorts of hoopla about the statewide minimum wage increase that went into effect Sunday. Minimum wage is now 21 percent higher, leaping from $5.15 an hour to $6.25 an hour. The minimum wage for tipped employees is 2 percent higher, going from $2.58 per hour to $2.63 per hour. And who’s going to end up paying a price for these wage increases? That would be the Arkansas businesses, residents and those who frequent Arkansas businesses.

I’m not saying minimum wage is a bad thing. In fact, I’m actually quite fond of it. There are employers who would willingly exploit their workers, and having a minimum wage curbs that to a certain extent. However, setting the lowest end of the pay scale too high is probably just as bad for the economy as setting it too low.

One of the most widely claimed benefits of the increase is that raising minimum wage will help those hard workers struggling to make ends meet. To some extent, that is true. However, what about the families or individuals who are able to receive government aid but are in the top end of the qualifying income bracket?

This wage increase will push some families into the next bracket, denying them the government aid that they still need. Earning $1.10 more an hour will not make up for losing Medicaid assistance, eligibility for food stamps, etc. This wage increase will, in essence, cost some Arkansans more than it helps them.

Another seemingly overlooked point is the fact that those who do not deserve wage increases will get them. We all know there are people out there who slack off and do as little as possible to get by. You probably work with a couple of them. This increase means that each employee, even that cashier who consistently shows up to work late and stoned and hasn’t been fired simply because he hasn’t been caught stealing from the company yet, will be making $1.10 more.

This also means that, with the added costs, companies may be less generous with their legitimate raises for the hard workers who actually deserve them. Costs will go up for businesses, which will either suffer a loss or find a way to make up the deficit. They may do that by decreasing benefits for workers, using lower-quality materials or raising prices. And who does all that benefit-lowering, quality-decreasing and price-raising affect? That’s right: Arkansans.

According to a study by the Arkansas Department of Workforce Services, only about 15 percent of workers in Arkansas make under the proposed minimum wage now. This means that raising the minimum wage will only raise the salaries of 15 percent of employed Arkansans, which only make up less than half of Arkansas’ approximate 2.7 million people. This means that there are more Arkansans with diabetes (eight percent, according to Partnership for Prevention) than with higher wages due to this legislation. This will not be a revolutionary change that betters the lives of Arkansans statewide.

As a server, I would also like to point out that the wage increase for non-tipped employees is ridiculously higher proportionally than for tipped employees. A 21 percent increase for those who don’t earn tips compared to a measly two percent increase for those who do? Man, I can feel that five cents more an hour burning a hole in my pocket already. My point is this: if you’re going to increase minimum wage, at least distribute the wages evenly. There are servers working just as hard to support themselves and their families as non-tipped employees, so extend your logic to include them, please.

So from what I can tell, this minimum wage increase benefits those who are making less than $6.25 an hour and weren’t going to get a big raise anytime soon. Some of these people work for employers who just aren’t willing to give out raises, but others don’t deserve a raise.

Yes, there should be a minimum wage in place. It helps keep employers from exploiting their workers. We shouldn’t get too carried away, though. Sure, the prospect of more money sounds good, but we should consider the long-term cost.

Wage increases should be based on merit and individually considered, not state-regulated.