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State's minimum wage hike could be more noticeable in Texarkana

State's minimum wage hike could be more noticeable in Texarkana

On Jan. 1, $2 an hour will separate entry-level workers in Texas and Arkansas

November 14th, 2018 by Junius Stone in Texarkana News

On Election Day, Arkansas voters approved Issue 5, the Minimum Wage Increase Initiative. The minimum hourly wage will go to $9.25 per hour on Jan. 1, followed by an increase Jan. 1 of the following year to $10 per hour and a final increase to $11 per hour on Jan. 1, 2021.

Minimum wage in Arkansas has been on an incline since voters passed a ballot initiative in 2014. The base wage went from $6.25 per hour to $7.50 an hour on Jan. 1, 2015, to $8 an hour a year later, and to its current level, $8.50 per hour, on Jan. 1, 2017.

Proponents of the measure said wages weren't keeping up with basic costs. Opponents argued, among other points, that it was presumptuous to project that the economy could support these increases in coming years and it could squeeze out some entry-level employment opportunities.

Dwayne Butler, co-owner of Red Carpet Employment Agency, said that this measure, combined with the fact that Texarkana is a border state, presents his company with some variables to consider.

"I don't know what the effect is going to be," he said. "I voted against it. My wife (and co-owner of Red Carpet) Aggie voted yes.

"I agree with those who oppose it that it could cost entry-level jobs. Entry-level jobs will be harder to get and it could also spur on automation, eliminating some entry-level jobs. On the other hand, with a higher minimum wage, more money does go out locally."

Butler said he thinks the measure will create new dynamics on both sides of the state line.

"Where we send an employee on either side of the city in each state, this will affect what they get paid," he said. "This will change the base pay of a minimum-wage employee, depending on what side of the state line they work."

Butler said he also expects this will change other considerations, like where people consider choose to live.

"People are looking at their children entering the work force," he said. "With this consideration now in effect, this may affect which side of the state line a family may choose to make a home."

When the minimum wage was raised back in 2014, Butler noticed a change in the type of applicant that came to them.

"Already Arkansas has a higher minimum wage than Texas (which is at $7.25 an hour). Those at that level of employment started coming to us already having jobs, but wanting to see possibilities of moving up on the pay scale," he said.

"About 50 percent of those who open applications with us are already employed," he added. "They just what to know what additional opportunities, both in salary and benefits may exist for them."

Many businesses don't seem concerned with the effects of Issue 5. Paul Baird, owner of Verona Restaurant and Wine Bar, said he did not anticipate changes or problems, even though his business is on the Arkansas-side of the state line.

"We already pay our people above the state-required minimum wage, and don't anticipate any effects from this change in the law," he said.

James Edwards, owner of 30 Burger on the Texas-side, also did not anticipate any repercussions from the coming change.

Mega-retailers Wal-Mart and Target earlier announced increases to their hourly wages.

On October of 2017, Target raised its minimum hourly wage to $11 an hour. They plan to raise it to $15 an hour by 2020. Target also plans to increase the skill-base and training of their hourly employees—to develop them professionally and increase their ability to serve their customers and stores.

Walmart has announced a wage increase to $11 an hour for their minimum-wage employees, as well as expansion of parental and maternity leave benefits. These will affect more than a million hourly workers across the U.S.

Arkansas For a Fair Wage was a main group arguing in favor of the measure. According to the website Ballotopedia, they argued, "The cost of groceries, housing and other basics had gone up for years. But wages haven't come close to keeping up. By gradually raising Arkansas' minimum wage to $11 an hour, we can help hard-working people meet their basic needs. At the same time, we'll help small businesses by putting more money into people's pockets that they can spend on goods and services in our state."

Arkansans for a Strong Economy led the campaign in opposition to the measure. Arkansas Governor Asa Hutchinson also did not support the measure.

"I will not vote for the ballot initiative that would raise the minimum wage over three years to $11 per hour. This would be a job killer for our youth particularly," Hutchinson said. "It is playing with fire to set a wage rate three years from now when we do not know the economic conditions that far down the road. I support raising the minimum wage, but it should be done through legislative action at such time when the economic outlook supports the action."

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