Arkansas minimum wage goes up to $11, businesses forced to make changes

Over the past three years, Arkansans have seen the state minimum wage go up every January. This year is no different but it comes at a time when some Americans have been knocked off their feet from the financial impacts of COVID-19.

“As a business owner, it has been a very difficult year, and of course when the minimum wage increase that will impact our bottom line,” Jack Sundall, co-owner of the Root Cafe in SOMA, said. Sundall and other business owners will start paying employees $11 an hour starting January 1, 2021.

“To support local farmers and producers that we buy from first of all we have to stay open as a business so we have to do what we have to do to be profitable.”

The Root has decided to raise the menu prices to keep up. Sundall said the minimum wage increase is coming at a good time since he says minimum wage workers have been the hardest hit by the pandemic.

“The plus side of that is our workers are going to make more money and they’re going to have more money in their pockets to go out and spend in the local economies with the small independent businesses,” Sundall said.

But Arkansas State Senator-Elect David Ray said it’s going to hurt workers who will see their hours reduced or are going to be laid off. Ray said he’d like to find a way to alleviate some of the burdens on small businesses.

“When Arkansans voted on this measure they simply weren’t given the opportunity to vote on common-sense exemptions like small businesses with 20 or 25 employees or fewer,” Ray said.

Ray said that he would support legislation that would phase out the income tax for low-income Arkansans.

“I think that’s a much better way to help low-income workers to sit than simply increasing the minimum wage because you put more money in their pocket without harming businesses’ ability to hire workers and create more jobs.”

Ray also said that he is the father of a one-year-old and a three-year-old and has seen their daycare bill drastically increase when the minimum wage went up. He said it could be really harmful to single parents who may not be able to absorb those costs.

Arkansans voted for this minimum wage increase back in 2018 and the state has steadily seen it increase.