Minimum wage bills moving in the South

An Arkansas state Senate committee approved a minimum-wage increase and passed it over to the House:

LITTLE ROCK - Saying they would rather see the state's minimum wage increased by law than have an amount put in the state constitution, a Senate committee on Monday endorsed a $1.10 per hour increase.

The action was taken on a voice vote by members of the Senate Public Health, Welfare and Labor Committee despite a warning by the state's hospitality industry that a hike would end up harming the state.

The measure recommended by the panel would increase the minimum wage in Arkansas from $5.15 to $6.25 an hour.

A similar measure advanced in the Tennessee House last week, despite intense lobbying against it by the National Federation of Independent Businesses.

All but six states have minimum wage laws separate from Federal law. Eighteen of those states set a higher minimum wage than the Federal standard. Tennessee is one of the six that does not have its own minimum wage law. Four of the other five are also in the South (Alabama, South Carolina, Mississippi, and Louisiana). Arkansas has a state minimum wage law, but currently sets it the same as the federal standard.

Florida's higher minimum wage (which was approved by more than 70% of voters and signed into law by Republican Governor Jeb Bush) doesn't seem to have hurt Florida's economy. The last time we were down there we saw "help wanted" signs everywhere. According to the Bureau of Labor Statistics, Dec. 2005 unemployment in Florida was 3.4%. It was 5.4% in Tennessee. The lack of a higher minimum wage doesn't seem to be helping South Carolina, where unemployment was 7.2%, or Mississippi, where it was 8.8%.

It should also be noted that the median hourly wage in Tennessee is already $12.59, more than twice the federal minimum wage. The average hourly wage is $15.74, more than three times the federal minimum wage. Sponsors of the Tennessee bill say that it will only affect about 7400 workers in the state.

According to an Economic Policy Institute report on the effects of higher minimum wages on small businesses, "the number of small business establishments grew twice as quickly in states with higher minimum wages (3.1% vs. 1.6%)", and "employment grew 1.5% more quickly in high minimum wage states."