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The 25-cent raise: What life is like after a minimum wage increase

SavUMor Discount Foods employee Ray Smith (left) greets a customer outside the store January 29, 2015, in Pine Bluff, Ark.  (Photo by Russ Scalf for The Washington Post)
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PINE BLUFF, Ark. — One Friday last month, Shanna Tippen left the house where she sometimes gets by with candles and flashlights, got into her beat-up 2003 Chrysler Sebring, and drove to work to pick up her first new-and-improved paycheck. The paycheck was stamped at the top with her employer's name — Days Inn and Suites — and showed the fruits of Arkansas’ long battle over the minimum wage.

Tippen’s new rate of pay: $7.50 an hour, up by 25 cents. It is the result of her state, along with 19 others, raising the minimum wage this year in the most forceful collective effort in recent history to boost the incomes of the poorest working Americans.

This raise won’t pull her out of poverty. It won’t free her from enduring months when she can’t afford her electricity bills. But the extra $2 a day, the extra $520 a year, will mean she can buy Luvs diapers for her grandson, even the pricier kind that doesn’t irritate his sensitive skin.

”Not much difference,” Tippen said of the raise, except for one product she buys twice a month. “The diapers, they’re $24.98 at Wal-Mart."

Like tens of thousands of others in Arkansas, and millions whose states this year enacted pay increases, Tippen has found herself caught in the reality of America’s fiery debate on whether to raise the minimum wage. While politicians frame the discussion in bold terms — a ticket to the middle class; a death knell for small businesses — Tippen’s experiences reflects a more realistic picture: a slight help for poor workers, but not the game-changer that politicians promise.

Even after the quarter-per-hour increase, Tippen’s modest stack of bills still exceeds her income by $200 monthly. Businesses all around Tippen, including the fast food joints she sometimes visits, have nudged up prices to cover the increased labor costs, business owners say. While some states are increasing their lowest wages, President Obama said in the State of the Union he wants to raise the federal minimum to give the “hardest-working people in America a raise.” Still, if Congress authorizes the hike — a potential giant leap forward, from $7.25 to $10.10 — some small business owners in Pine Bluff say they won’t survive.

"At $10.10, we probably wouldn’t be here anymore,” said Steven Horton, owner of SavUMore Discount Foods, just down the road from the Days Inn.

For Arkansas to enact its own minimum wage hike, it took years of dead-end legislative battles, a statewide grassroots campaign, and then a vote last November. The increase, though small, was resonant in Pine Bluff, a town of 48,000 lined with abandoned pawn shops, ramshackle single-story homes, and still-thriving fast food joints and dollar stores. “Mostly everybody struggles in Pine Bluff,” Tippen said.

Tippen, 43, lives with two of her grown children (ages 24 and 21), who haven’t been able to find work, though she wants them to. There’s also one grandchild, Zayne, about to turn two. Zayne goes through anywhere from 108 to 120 diapers every two weeks, which means Tippen, the only person in her family who works, spends around $25 of every paycheck on diapers.

Several weeks ago, when Zayne was down to his final diaper, Tippen panicked and realized she didn’t have any cash. So she called a friend, asked to borrow some money, and went to Wal-Mart.

“I might not have to do that anymore,” Tippen said.

At a Fourth of July festival last year, Tippen was approached by somebody collecting signatures. She was told her support could help improve the minimum wage. Tippen signed her name.

“I was like, ‘Yeah, this is great,’” she said.

At least twice since 2009, Arkansas’s state legislature had talked about a hike and decided against it. Activists decided, instead, on a go-around. They needed 62,507 signatures to put a referendum up for a vote, and so last year a coalition of community, civil rights and labor groups went county-by-county. In November, with 66 percent voting Yes, Arkansas became one of four states — all Republican-leaning — to choose a pay hike. In Arkansas, the raise comes in steps: to $8.00 next year, and to $8.50 in 2017.

None of this will be enough for Tippen to escape poverty, but advocates say that extra dollars in the pocket of somebody making less than $16,000 can’t possibly hurt. Despite warnings about job-killing impact of minimum wage increases, no business in Pine Bluff indicated plans to lay off workers, even as the state minimum wage ratchets up in the coming years.

“I know there are economic arguments against raising the minimum wage, but I think just purely in a state where folks are poorer and working hard, we know it’s not enough for them to live on,” said Steve Copley, who chaired the coalition, called Give Arkansas A Raise Now. “It doesn’t surprise me that ordinary folks would say, ‘Yeah, it’s the right thing to do.’”

Without federal action — the national minimum wage has been at $7.25 since 2009 — states have emerged as the new battleground in the minimum wage debate. Twenty-nine states, as well as D.C., now require minimum wages above the federal level. States in the south tend not to be among them. Arkansas’s neighbors — Louisiana, Mississippi, Tennessee — don’t have state laws and just go with the federal minimum. Until this year, Arkansas’s minimum was actually below the federal level, at $6.25. But all companies doing more than $500,000 annually in business had to stick with the federal law.

Federally, the $10.10 proposal has gone nowhere in Congress. Supporters say the increase is essential just to return the minimum to its (inflation-adjusted) value of 40 years ago. In 1968, somebody could live above the poverty line with a family of three on a full-time minimum wage job. Now that same worker is below the poverty line with a family of two. Those who oppose Obama’s proposed increase, including the small business and restaurant lobbies, note a 2014 Congressional Budget Office report that projected a $10.10 minimum wage would cost the equivalent of 500,000 jobs.

In Pine Bluff, the minimum wage increase has caused debate about whether companies should deal with smaller margins or raise prices. At Burger King, employee Colby McIntyre — a sweaty 37-year-old grilling burgers next to a heat lamp — sometimes hears customers remark how prices have gone up since January.

“They went up so I can keep money in this pocket,” McIntyre tells them, laughing, and he doesn’t mention that when he works until the 1 a.m. closing time he has to call his brother to come pick him up, because he can’t afford a car of his own.

Dominic Flis, whose company owns 18 Burger Kings in central Arkansas, tells a slightly more complex story about the price increase. For one thing, beef prices have risen 20 percent over the last year. More broadly, the raises given to minimum wage workers were only part of the labor cost increase. The wage hike caused a ripple effect, where hourly workers who weren’t at the minimum were given a commensurate raise.

“If somebody was already making $7.50 already, and minimum wage goes to $7.50, they’ll have some expectation of a raise as well,” Flis said. “And I have to maintain my workforce.”

At the Days Inn, the general manager, Herry Patel, says he opposed the minimum wage increase.

“[The referendum] was bad,” he said. “Bad for Arkansas. Everybody wants free money in Pine Bluff.”

He pays all of his housekeepers and front desk employees the minimum wage, and has instead invested in the rooms, adding new sinks, new carpeting, and flat-screen TVs. New headboards are coming soon. Rooms go from anywhere between $55 to $99 per night, and this time of year, the hotel, with 51 rooms, is about two-thirds full.

Tippen has a do-everything job. She works at the front desk. She cleans up the continental breakfast bar. She helps customers with fresh towels or Internet problems. If working the evening shift, her favorite, she’ll walk around the property once or twice, playing the role of a de facto night watchman.

“I’ve spent my whole life doing evening shifts,” she said.

"Everybody wants free money in Pine Bluff."
— Days Inn manager Herry Patel

She’s worked minimum wage jobs for much of her life, and the one time she didn’t — earning $8 per hour, in 2004, at a payday lender in Sheridan, Ark. — she set herself up for a major tumble. She’d just gone through a divorce and she was terrified of losing her house, she said. She decided, with the help of two acquaintances, to steal $11,200 from her company.

“Pulling it off was easy,” Tippen said, in an account supported by court documents. “The decision to do it was hard.”

Starting from October 2008, she spent nearly a year in jail.

“I lost [time] with my kids, I lost their respect, I lost everything,” Tippen said, and she believes that crime explains why she has so little leverage as a job-seeker, why she’s fighting with others in Pine Bluff just to be paid $7.50.

Tippen thinks sometimes about finding a job that doesn’t squeeze her quite so tightly. For several years, she’s had her resume posted on And just a few weeks ago, she noticed a job at a new hotel in Little Rock, about 45 minutes away, that pays $10 per hour. So she drove up for an interview with Hancock Staffing, the job agency filling the position, and said “everything went well.” She’s waiting to hear back.

Given the size of her family, she’d need to earn nearly $12 an hour to live above the poverty line. And her family is about to grow — another grandchild who will live with her. The baby girl is expected sometime this month. Tippen will be buying the diapers.