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Hard work, low pay, no getting ahead: The most the minimum wage in Arkansas promises

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If you work a minimum-wage job — $7.25 an hour is the federal rate — for 40 hours a week, your yearly earnings are $15,080. If you support only yourself, that puts you a tad over the federal poverty rate, but under the "living wage" rate for Pulaski County as calculated by the Massachusetts Institute of Technology.

If you support one or more other people on the minimum wage, you fall below the poverty line.

Some people would argue that you're not meant to be able to live on the minimum wage, though that was Congress' intention when it passed the first minimum wage law in 1938.

Others, like the Rev. Steve Copley, say the minimum should be a wage you can live on: "It's not right when people work hard and play by the rules and fall behind and can't make a living."

Most Arkansans agree with Copley, a poll conducted by the AFSCME (the public employees union) earlier this year indicates. More than half — 54 percent — of those polled would "definitely" like to see the state minimum wage raised from $6.25 (a rate that applies to a small number of employees) to $8.50 an hour, with annual indexing to inflation. Another 19 percent were "probably for" a raise.

But despite the poll showing 73 percent of Arkansans were for or likely for a modest raise, a proposal by Rep. Butch Wilkins, D-Bono, to raise the state rate even less — from $6.25 to $8.25 an hour — couldn't get out of committee in the last legislative session. It failed by one vote. The arguments against it were the same used the last time Arkansas raised the minimum wage, in 2006, under Gov. Mike Huckabee: It would hurt small business. Former Republican state Rep. Dan Greenberg went so far as to suggest that a raise in the minimum wage would be "cruelty in the guise of compassion," making it harder for persons without college degrees to get a job.

Given the broad support the survey suggested, Copley and Give Arkansas a Raise Now, a coalition of groups — faith-based, labor, civil rights, hunger groups, individuals — will try to put a hike in the minimum wage to a vote in the 2014 General Election. The ballot will propose a minimum wage of $8.50 an hour, tied to the consumer price index. They expect to get the ballot title before the attorney general soon and start the petition drive once the title is approved. Copley said they'll try to get 100,000 names to make sure they have the minimum of 78,000 legal voters required to get on the ballot.

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Even $8.50 wouldn't approach what the minimum wage would be if it had been tied to inflation in the past four decades. The federal minimum wage in 1968 had the buying power of $10.74 in today's dollars.

A study by Pew Research found that the number of people who make the minimum wage is low: about 4 percent of hourly workers nationally. The South fares worse: Arkansas is in the Census Bureau region with the highest rate of minimum-wage workers, with about 7.3 percent of hourly workers making the federal wage or less. According to the Bureau of Labor Statistics, the total number of Arkansans who are making hourly wages of $7.25 an hour or less is 50,000.

There is a feeling that people making the minimum wage are mostly teens and those whose education ended at high school. Here's the real breakdown: Nearly half, 49 percent, are adult women. Twenty-eight percent are adult men. Teen-agers account for 24 percent.

It is true that persons who have only a high-school degree or less make up most of those working for minimum wage — 59 percent. However, one in three — 34 percent — has some college hours or an associate degree. Seven percent have a bachelor's degree.

Low-wage earners also have a hard time getting full-time jobs. Sixty-four percent of the nation's minimum wage jobs are part-time, the Pew study found. (Employers can avoid offering health benefits to employees who work less than 30 hours a week.)

***

That means someone like Courtney Lacy, 28, of Little Rock has to work two jobs, and even with two jobs, thanks to variable hours, she's still in a tight spot.

From 8 a.m. to 1 p.m., Lacy takes care of children at the Kidzone daycare; in the afternoon, she works on an on-call basis taking care of older people at a retirement home in Sherwood. At Kidzone, Lacy makes $8.25 an hour, which is $1 more than the federal minimum wage of $7.25 and would be considered a "living wage" for a single person working 40 hours a week. But Lacy can get only about 25 hours at the daycare, which brings in around $206 a week, or $824 a month. Lacy also has three children, ages 5, 7 and 9. The MIT study puts a living wage for a family that includes one adult and three children in Pulaski County at $27.31 an hour.

In a good month, Lacy makes another $400 or so from the retirement home. The pay there is $9 an hour, but she can't count on regular hours— she was not working there at all the week this reporter talked to her. Her two paychecks combined produced about $1,224 before taxes last month, she estimated.

Here's where it goes: $400 a month in rent for her one-story house at 15th and Ringo streets; $90 for water, sewer and trash; $65 for electricity, $35 for gas, $55 for her telephone. She pays $100 a month in insurance on her car and has three more car payments to make, a total of $600. She has credit card debt of $6,000, which she is not yet paying off. She also has student loan debt of $6,000 — she attended, but didn't graduate, from Pulaski Technical College and got a medical assistant diploma from Remington College — and is in a payback program that cost her $250 this month, $125 next month and $40 in subsequent months.

Lacy drives a 1999 GMC Suburban she bought last year — "it was the cheapest car on the lot," she says — but never has enough money to fill it up, since a full tank costs around $120. She said she puts in $20 and $10 as she goes.

So if you consider this month's $250 truck payment, the $250 college loan program sign-up and another $100 for gas, Lacy's expenses this month will be $1,345 — more than she will take in this month.

The federal government keeps the wolf from Lacy's door. She qualifies for $521 a month in SNAP (Supplemental Nutrition Assistance Program) to buy groceries, though that could change, since the program will be cut in November and faces more cuts if the U.S. Senate approves a House measure passed last week to cut $40 billion from the program over the next 10 years. (Arkansas's House delegation, all Republicans, voted in favor of the cuts, a move predicted to affect one in six Arkansans.) Lacy says she can feed the family of four on that "if I budget my money right." Her children qualify for ARKids First health insurance, which uses Medicaid funds. (Her health plan: "Home remedies.")

Lacy would like to make just a bit more money to be secure, and to return to school to become a licensed practical nurse. That would require that she get more student loans, however, which is not something she wants to do.

She has turned to Our House, a shelter for the working poor, for help on how to stay out of the shelter. They have provided budgeting advice.

***

Jilnail Howard, 28, is also working two jobs, for a total of 55 hours to 65 hours a week. She's not sure she can keep it up. She'd like to spend time with her three children, ages 9, 4 and 2 years. There was a time in her life when the father of her third child was around and helped with expenses. That is no longer the case.

Howard had dreams at one time. She graduated from Hall High, where she was a member of the Arkansas Young Artist Association. She went to UALR for a year to study criminal justice. She thought she would be a lawyer, a "power attorney."

Instead, she became a mother, the baby's father her high school sweetheart. He split when the baby was born, and she began a repeating series of minimum-wage jobs, new boyfriends, a couple more babies and more abandonment. "I feel it's like a curse," she observed.

At one point, after the father of her 2-year-old left, Howard moved into Our House. But while she thinks the program is beneficial, it made her feel defeated. The women around her, she said, had been physically and mentally abused. "It was a wake-up call," she said.

She now lives with her brother and pays her brother-in-law to look after her kids when she's working.

It was noon when she talked to a reporter; she had not yet gone to bed from her job at Kentucky Fried Chicken/Taco Bell. (It's the fourth fast-food restaurant that's employed Howard — she's worked Wendy's and Rally's as well. Her best job was at McDonald's — $9.50 an hour — but she said the hours conflicted with getting her kids to school on time.)

The KFC job is full-time; she makes $8 an hour. Her home-health job with Carelink, which she started only last week, is part-time and pays $7.25 and mileage.

Howard pays her brother $500 a month in rent and utilities. She pays $160 a month for childcare. Her phone bill is $60. She drives a 2002 Mitsubishi Lancer and pays for gas and insurance. She has credit card debt, but doesn't think she can afford the legal costs of filing for bankruptcy.

A hike in the wage just to $8.25 would help, she said. "I'd love to have a decent 9 to 5 or 6 job," she said. Her children complain that she doesn't take them anywhere for fun. She'd like to be home to "check their homework, have movie nights." She's frustrated. She's even considered whether it would be best for her children to give them up, but "I can't see myself giving up my kids."

Soon, she sighed, it's going to be Christmas.

Howard drew a sketch of an eye in this reporter's notebook. "The eyes always tell a story," she wrote by the side. "Just look." Her own were tired.

***

Debra Pendergrass, 45, thinks she'll have to get a second job, now that her husband has retired. She works at Burger King. She started at $7.50 an hour but now makes $8.25. Sometimes she works 20 hours a week, sometimes fewer. Her last paycheck, for 57 hours of work, was for $472, but after taxes $386. She applied at the Dollar General store but hasn't heard back.

Pendergrass' husband receives a Social Security check of $500 a month, which covers their mortgage debt. When he was working as a construction worker, she said, "he made pretty good," though he didn't work a lot in winter. After he retired, the couple had to go to their church pantry for food. "We had never done it before," she said.

Her monthly bills include utilities, phone, gas for the car. She has no health insurance, so she is working on a payment plan for the medical bill she owes for treatment of reflux and a bout of irritable bowel syndrome last year.

Pendergrass has had to cash in her small 401(k) — which she had through Burger King — to make ends meet.

"I get depressed a lot," Pendergrass said. "Sometimes I get so far behind" on their bills. The SNAP program will help her family as well. Her church health center helps pay for the Nexium she takes for the reflux.

***

Arkansas last raised the state minimum wage, to $6.25, (which applies only to persons whose employer engages in no interstate commerce, employs no more than three people and has a business volume of less than $500,000) in 2006. (Employers of persons who earn tips may pay less, but if their employees' tips don't bring the pay to $7.25 an hour, the employer must make it up.)

Rep. Wilkins told the members of the House Public Health, Welfare and Labor Committee that it was his constituents that he met going door to door during his campaign that persuaded him to introduce his bill to raise the state wage to $8.25. "If I thought it was damaging to the economy I wouldn't be here," he said, "but I can't imagine what these people are going through."

State Rep. Justin Harris, R-West Fork, however, said raising the minimum wage would cost jobs, because small business employers wouldn't be able to afford to keep their workers on. Rep. David Meeks, R-Conway, called the bill "noble," but he'd heard from businesses that they'd pass the cost on to their customers. "How do you respond to that?" he asked Wilkins.

"Studies just don't indicate that," Wilkins replied. "There's no proof" that happens.

State AFL-CIO President Alan Hughes, who was part of the group working to raise the minimum wage in 2005, told the committee, "I've been at this table several times. Last time we heard the same stories, pros and cons. But think back when it passed: Did you see all that happen on the bad side? The only thing new about [this discussion] is you sitting at this table ... Did you see all those horrible things happen? We'd have to go another two years before we can do this again. ... Everything is going up. I'm hearing from my members saying we've got to do something for those who are low-income. I'm asking you to consider those who are struggling. ... [We're] only asking you to raise it a dollar."

Brett Kincaid, outreach director for Arkansas Advocates for Children and Families, also testified for Rep. Wilkins' bill, saying it would help those that cook their lunches and clean their schools.

In an interview last week, Kincaid noted the close correlation between poverty and poor school performance and future earning potential. "There's really no question about how important it is to raise family wages and income to get more families out of poverty," Kincaid said. There is no correlation, on the other hand, to wage increases and economic downturns, he said. "American workers are the job creators," he said. If they are paid more, they can spend more.

Copley said studies show that when people are paid more, they are more productive. They see a correlation between hard work and pay. Otherwise, if you're never going to get ahead, your morale suffers.

'When we've looked at every time the minimum wage is increased, we really don't see any loss of jobs."

***

Arguments against raising the minimum wage are particularly tough to swallow if you consider the enormous disparity in wealth in America today. Corporate profits hit a record in 2012 as a share of U.S. economic output, a study of Internal Revenue Service data by three major universities concluded. The wealthiest Americans had income gains of 20 percent — and 95 percent of those gains went to the top 1 percent of Americans as measured by wealth.

The rest of America in 2012: Incomes rose 1 percent.

The current American economy has been compared to the Gilded Age when a few families — the Rockefellers, Carnegies, Astors and others — held such enormous wealth. Today we have the Walton heirs, who famously hold more wealth than the bottom 42 percent of Americans combined — many of whom, ironically, work for the Waltons. One in five people (nearly 600,000) in the Waltons' home state live in poverty, according to Census figures and one in three jobs is low-wage.

In Arkansas in 2012, the lowest-paid jobs were in the restaurant service industry. The average wage was at or above the minimum now being proposed, ranging from $8.26 to $8.44, according to the Arkansas Occupational Employment and Wages publication of the state Department of Workforce Services.

Montine McNulty, director of the Arkansas Hospitality Association, which lobbies for the restaurant, lodging and tourism industry, said the association opposed the $2 increase in the state minimum wage that Rep. Wilkins' bill would have implemented.

"I'm really here to speak on behalf of the mom and pop employers," she told the house committee, who are faced with high fuel, employment taxes, "increased regulation" and labor costs. She said there was "fear and uncertainty about what it's going to cost businesses for health care. All of those things make [a raise in the minimum wage] a really scary thing. ... I feel hours would be cut. ... A lot pay wages based on what demand is and what they have to pay to get good employees. That's a good way to do it."

But here's what Bryan Rucker, 25, an assistant manager at a Taco Bell/Kentucky Fried Chicken fast food outlet in Little Rock, thinks: If he could offer his employees $8.25 an hour, his employer might even save money.

"$7.25 is a slap in the face," Rucker said. He said higher wages give people a "greater incentive to work."

Rucker says he tries to pay starting wages at $7.50, a bit higher than the federal minimum of $7.25. "A dollar an hour [extra] would be significant," he said. "If you're good, I try to give you as many hours as I can," Rucker said "If I had a crew of three who worked really hard, I wouldn't have to work extra people."

Some minimum wage workers, Rucker said, come in "angry at the world," put in their four hours and leave. Those folks may not stick around. He has a cashier, on the other hand, who works so hard and has been so helpful she's already gotten a promotion.

Rucker knows what it's like to work hard. After he got out of the Army, he worked two jobs, as a tattoo artist and at Sports Academy. He made pretty good money, thanks to long hours and decent pay from the tattoo job and long hours, on top of the 20 to 30 hours at Sports Academy. But he had to give up the tattooing thanks to wrist strain from his Army job as a machine gunner, so he moved to Walmart, where he was paid $7.65 an hour and worked full-time, and kept the part-time job at Sports Academy as well.

Rucker quit those jobs to go back to school to complete his bachelor's degree in music (he plays saxophone and euphonium), but he still worked, this time at Bale Honda. After he got the degree, he got the management job at Taco Bell-Kentucky Fried Chicken, where he is paid a salary of $29,030 a year. He works 50 hours a week, which works out to a little over $10 an hour. When he works more than 50 hours a week, he's paid what he calls "Chinese overtime" — $5 for every extra hour. Rucker is paying for his fiancee's tuition at Remington and supporting her child and his child on the pay.

Would his employers be supportive of raising the minimum wage? No, he says. They believe they'd lose money.

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