Analysis Politics

Minimum Wage in Five States Could Look Vastly Different After Election Day

Teddy Wilson

Voters in Alaska, Arkansas, Illinois, Nebraska, and South Dakota will decide ballot measures, also known as initiatives or issues, on Election Day to increase those states’ minimum wage.

Voters in 42 states on Election Day will decide an assortment of ballot measures, also known as initiatives or issues, that cover various largely polarizing political issues. Voters in five states—Alaska, Arkansas, Illinois, Nebraska, and South Dakota—will decide ballot measures to increase those states’ minimum wage.

Each measure would increase the minimum wage above the federally mandated minimum wage of $7.25 per hour, but how far above that threshold and the timeline for the increases vary by state.

Illinois is the only state of the five where the ballot measure is not legally binding. The ballot measure would only advise the state legislature to take action and increase the minimum wage. The Minimum Wage Increase Question would potentially lead lawmakers to increase the minimum wage from $8.25 to $10 per hour.

If each measure is passed (and Illinois lawmakers acts on their constituents’ advice), it would increase the pay of at least 680,000 low-wage workers in those states, according to an analysis by FiveThirtyEight.

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Only two states, Alaska and South Dakota, include language on the ballot measures that would mandate an annual increase in the minimum wage to adjust for inflation. South Dakota is the only state in which the measure also addresses workers whose wages are made through gratuity or tips.

Each measure was placed on the ballot through a ballot initiative process, with the exception of Illinois. In order for the measures to qualify to be placed on the ballot, activists in the four states gathered and verified a total of more than 200,000 signatures.

There are organized campaigns and political action committees actively working to support the measures in each state, but there is no similar organized opposition to the minimum wage measures. While there is a partisan divide between supporters and opponents, Republican candidates for governor and U.S. Senate in both Alaska and Arkansas have voiced their support for boosting low wages.

Alaska Ballot Measure 3

In Alaska, Ballot Measure 3 would increase the state’s minimum wage from $7.75 per hour to $8.75 per hour beginning January 1. The minimum wage would be increased again to $9.75 per hour a year later. The state’s minimum wage would be adjusted for inflation or increased by $1 over the federal minimum wage—whichever is higher.

While the median household income is above the national average and the percentage of residents living in poverty is also below the national average, the cost of living in Alaska is significantly higher than most other states. Alaska has the fourth highest cost of living in the United States, behind only Hawaii, New York, and Connecticut, according to a report by the Department of Labor.

Republicans in the state house last spring introduced and passed HB 384, which would have increased the minimum wage to $9 per hour on July 1, and to $10 per hour in 2015. Even though the bill would have increased the minimum wage by more than the ballot measure, Democrats opposed it because they claimed Republicans would simply repeal the law the next year as they had done before.

Alaskan Republicans passed a bill in 2002 to mandate that the state’s minimum wage increase with inflation. That same year Democrats had successfully placed a measure on the ballot to increase the minimum wage. Once the legislation was passed, the measure was by law forced to be removed from the ballot. The next year, Republicans passed legislation to remove the inflation adjustment from the minimum wage.

When the legislative session was adjourned in April, HB 384 died in the state Senate Finance Committee.

U.S. Sen. Mark Begich (D) has come out in favor of raising the state’s minimum wage, and has also co-sponsored legislation to increase the federal minimum wage. Begich’s Republican opponent Dan Sullivan initially opposed the minimum wage increase, but later changed course to support the measure.

A Public Policy Polling poll found that 58 percent of Alaskans surveyed support the measure to increase the minimum wage.

Arkansas Issue 5

The $6.25 per hour minimum wage in Arkansas is lower than the federal minimum wage, but is superseded by federal law. Issue 5 would increase the state’s minimum wage to $7.50 per hour on January 1. It would also increase the minimum wage twice more, to $8 per hour on January 1, 2016 and to $8.50 per hour on January 1, 2017.

Arkansas has the fourth highest percentage of residents living in poverty. The median household income, over the past decade, has been among the lowest in the nation, and has seen little improvement.

The ballot measure survived a court challenge, as the Arkansas Supreme Court issued a ruling Monday that it could remain on the ballot. Little Rock businessman Jackson T. Stephens challenged the measure on the grounds that the deadline to submit signatures was not met and that signatures submitted by supporters were invalid.

Stephens owns one of the largest private investment banks in the country and is board chairman of the conservative Club for Growth, a 501(c)4 that endorses and campaigns for far-right candidates.

Federal Election Commission filings show that since 2010, Stephens has contributed $1.4 million to the Club for Growth Action independent-expenditure super PAC.

The Club for Growth endorsed Rep. Tom Cotton (R-Dardanelle) for U.S. Senate in Arkansas and launched attack ads against incumbent Sen. Mark Pryor (D). Cotton has received more than $546,000 in campaign contributions from the Club for Growth, according to data from the Center for Responsive Politics.

Pryor and other Arkansas Democrats have made increasing the minimum wage a focal point of the campaign. Pryor criticized Cotton for his lack of support for measure. Cotton, who voted against increasing the federal minimum wage, announced his support for the measure, effectively blunting Pryor’s criticism.

Nebraska Initiative 425

Nebraska’s Initiative 425 would increase the state’s hourly minimum wage to $9 per hour over two years. The minimum wage would be increased from $7.25 per hour to $8.00 per hour on January 1, and then increase to $9.00 per hour at the start of 2016.

If passed, it will be the first time the state’s minimum wage was higher than the federal minimum wage.

The median household income in the state is just below the national average, but the percentage of residents living in poverty is also below the national average. Supporters of the measure claim the increase is needed in part because Nebraska had the second highest percent of hourly workers at or below minimum wage when compared with surrounding states.

Opponents this fall held a press conference and outlined their opposition to Initiative 425. They claim it would increase costs for small business and do little to help the working poor. The press conference was organized by the Platte Institute for Economic Research, a conservative think tank headquartered in Omaha that promotes right-wing economic policies.

The founder of the Platte Institute is Pete Ricketts, the Republican candidate for governor. Ricketts’ father, Joe Ricketts, is the founder of the online brokerage firm Ameritrade, and the founder of Ending Spending Action Fund, a 501(c)4 that has spent millions over the last few years supporting conservative candidates.

Ricketts has opposed raising the minimum wage on the campaign trail, while Chuck Hassebrook, the Democratic nominee for governor, supports raising the minimum wage.

South Dakota Measure 18

Measure 18 would increase the minimum wage in South Dakota from $7.25 to $8.50 per hour beginning January 1. It would also mandate an increase in the minimum wage each year to adjust for inflation. Workers who earn wages through tips would also see a wage increase, as the measure would increase their hourly pay from $2.13 to $4.25 per hour.

One in six employed South Dakota workers would likely see an increase in their wages if the minimum wage were raised, according to an analysis by the South Dakota Budget and Policy Institute. The analysis also found that one in seven children in the state have at least one parent that would be affected by the minimum wage increase.

The Lincoln Journal-Star endorsed voting for Measure 18, because the benefit of increasing the minimum wage outweighed the possible negative impact.

“Fears of negative economic impacts have proved exaggerated in the past when the minimum wage was increased,” the newspaper’s editorial board wrote.

Measure 18 appears to have significant support from South Dakota voters, as 60 percent of likely voters said they support the minimum wage increase, according to a recent SurveyUSA poll. Twenty-eight percent oppose the increase and 13 percent are undecided.

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