Arkansas voters got the nation’s attention in the General Election, overwhelmingly approving a minimum wage increase to $11 an hour by 2021.
That, according to a recent Washington Post article, set up “a grand experiment in whether a minimum age in a poor state can raise workers out of poverty – or derail the state’s economy.”
We detest the stigma of Arkansas as a “poor state” but few can argue that poverty is too much a part of our economy. So, we suppose it is out of character for Arkansas to seem to be a leader in something considered liberal such as raising the minimum wage.
But, again referring to our status as a “poor” state, the Washington Post article said, “given the state’s low cost of living and modest salaries, entry-level workers will soon be better off financially in Arkansas than in places such as California, New York and the District of Columbia that are hiking their minimum wages to $15 an hour.
“By 2021,” the article continued, “a minimum wage worker in Arkansas will earn nearly 70 percent as much as the median worker in the state, according to analysis by Jeremy Horpedahl, assistant professor of economics at the University of Central Arkansas. For that to be true in the District of Columbia, the minimum wage would have to be $23 an hour.”
That puts us in a kind of rarified economic strata, but it will be interesting to see how it all translates in fiscal reality. Will small business owners, instead of paying higher wages to the same number of workers, need to lay off some employees for the bottom line to be able to pay the increased amounts?
That question was raised in the Washington Post article that reported, “There is widespread agreement among economists that raising the minimum wage too high would cause job losses, but no one really knows what amount ‘too high’ is. Evidence so far suggests there have been few, if any, job cuts in places where entry-level wages have risen.”
Opinions are varied in the state with the article saying Gov. Asa Hutchinson warned the minimum wage hike would be a “job-killer” while a small business proprietor who owns a Little Rock restaurant said, “I voted for it. I’m very proud of Arkansas for this. Voters sent a very progressive message on wages in a state that is not very progressive.”
It is refreshing to hear Arkansas referred to as progressive, but it will be interesting to see if it is effective in lifting workers out of poverty without a parallel effect of reducing the number of jobs in the state.