Issue 5: Lifting Arkansas Out of Poverty

By Arik Cruz

The views expressed in this post are those of the author, and do not necessarily reflect the opinions of the Journal, the William H. Bowen School of Law, or UA Little Rock.

This Election Day, we will have many significant decisions to make regarding the future of Arkansas. While races for governor, state representative, or United States Congress often dominate the headlines, ballot initiatives are quite often left to anguish on the sidelines of the political discourse. This platitude is quite unfortunate considering that such referendums are perhaps the truest reflection of the actual will of the people. Additionally, ballot initiatives nearly always have far reaching and transformative potential ramifications for voters. Issue Five is no exception.

Issue Five – officially titled “An Act to Increase the Arkansas Minimum Wage” – would increase the state minimum wage from its current level of $8.50 per hour to $9.25 per hour on January 1, 2019, then to $10 per hour on January 1, 2020, and finally to $11 per hour on January 1, 2021. This would be one of the highest minimum wages in the entire nation, as California and Massachusetts currently have equal minimum wages (though both states will increase their wages to $15 per hour by 2023)  and only Washington and the District of Columbia currently have minimum wages that are over $11 per hour (though they too are set to raise wages over the next few years).

Support for Issue Five is surprisingly high. A September poll showed the initiative with a 60 percent support rate. A similar ballot measure – which raised the minimum wage from $7.25 to its current level – passed in 2014 with 66 percent of the vote. Why, in an overwhelming and unapologetically conservative state such as Arkansas, is support for a minimum wage increase so high?

The answer might just have something to do with a combination of old school and new school socioeconomic thinking. Indeed, I postulate that a combination of the underlying principle of West Coast Hotel Co. v. Parrish and the forward-thinking views of Sen. Bernie Sanders and others like him have intermingled to create a time in America – and Arkansas – in which creating an economic system that sustains all people has finally become a concern on the minds of the average voter.

West Coast Hotel is most commonly known as the Supreme Court case that recognized the power of the states to prescribe a minimum wage. Lesser known or discussed is a portion of Justice Holmes’ reasoning for that decision.

The exploitation of a class of workers who are in an unequal position with respect to bargaining power, and are thus relatively defenseless against the denial of a living wage, is not only detrimental to their health and wellbeing, but casts a direct burden for their support upon the community. What these workers lose in wages, the taxpayers are called upon to pay. The cost of living must be met…the community is not bound to provide what is, in effect, a subsidy for unconscionable employers. The community may direct its lawmaking power to correct the abuse which springs from their [the employers] selfish disregard of the public interest.”

This passage reflects quite well a side of the argument for a living wage that is not often discussed but that goes hand in hand with the overarching moral responsibility to ensure that all of our people have access to socioeconomically fruitful labor. When employers fail to pay their workers living wages, those workers must turn somewhere else – welfare, perhaps – in order to make ends meet. Welfare, of course, is funded by taxpayer dollars. Thus, allowing employers to continue paying its workers poorly is tantamount to subsidizing those very same “unconscionable employers.”  While most do not take issue with providing subsidies to those in need, it should be entirely unacceptable to facilitate a company in causing its employees to necessarily need such assistance simply due to economic efficiency or capitalistic greed.

Enter Bernie Sanders and his Stop BEZOS Act. This bill would place a tax on “any company with more than 500 employees whose workers draw means-tested social assistance benefits — Medicare, food stamps, housing aid, etc. — of $1 for every $1 worth of benefits the workers receive.” Aimed at big corporations like Amazon and Walmart, it would take the above mentioned employers to task for their misdeeds. Unfortunately, according to many analysts, this bill would never work and would quite possibly have many unintended negative effects on those the bill aims to help. But, sometimes it’s better to take Bernie Sanders seriously than it is to take him literally.

Sanders knew when he proposed this bill that it would never go anywhere. But it was never meant to. It was a message bill – meant to get the attention of the public (and the unconscionable employers) and to invoke increased support for a living wage. And it just might be working. This month, Amazon pledged to raise its minimum hourly wage to at least $15 and has gone on to implement additional raises for its longer term employers, as well as certain other employee incentives.

So how does this tie in to Issue Five? All of this fuss about the minimum wage – whether in our state or in Sen. Sander’s office – isn’t just a coincidence. It’s part of a wave that’s slowly sweeping the nation. People are finally coming around to the idea that a living wage is an integral part of society. If such a notion can find support in Arkansas, which it obviously seems to have done, then surely it will continue in its trajectory.

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