On Wednesday, the minimum wage in Fort Smith, Arkansas, went from $9.25 an hour to $10.
The same’s true in Little Rock, Bentonville and the rest of the state.
Across the Arkansas River in Moffett and throughout Oklahoma, it’s still $7.25 an hour, and, unless things change, it’ll still be there in 2021, when Arkansas goes to $11 an hour.
Which state do you think is more likely to succeed in dealing with the labor shortage in a time of 3.5% unemployment nationally? Which do you think is more likely to reduce poverty?
While most of the nation has moved forward, Oklahoma and the federal government have been stuck at $7.25 an hour since 2009. The AFL-CIO points out that since 2009, the price of beef has risen 74%, the price of milk has gone from less than $3 a gallon to more than $4 in many places and overall food prices have risen 9%. Meanwhile, CEO salaries and stock prices have skyrocketed.
Arkansas isn’t the outlier. We are.
The National Employment Law Project reports that 21 states and 26 cities and counties, raised their minimum wage with the new year. Later in the year three more states will raise their rates, and Illinois will do it again. A total of 24 states and cities and counties by the dozen have decided to leave Oklahoma wage laws further behind. Paycor reports that Oklahoma and 19 other states are at $7.25. Two states — Georgia and Wyoming — have state minimums below $6 an hour, but most workers there are covered by the federal rate.
Meanwhile, in Massachusetts, the minimum wage is $12.75 an hour. In Seattle, New York and a couple of dozen other cites, it is or soon will be $15.
But we’re not Massachusetts or New York City, right?
How about these comparisons: In Nebraska and New Mexico, the rate is $9 an hour. In Missouri, it’s $9.45. In West Virginia, it’s $8.75.
And on Nov. 6, 2018, Arkansas voters approved a plan to raise that state’s minimum over the course of three years, capping at $11 an hour next year.
We’re not keeping up with Seattle, no news there. But when we’re not keeping up with Arkansas, everyone should pay attention.
The conventional wisdom among those who don’t want Oklahoma to raise its minimum wage is that it would price low-skill people out of work, increase unemployment, slow economic growth and increase poverty. When you’re a poor state competing for jobs, you can’t afford to outprice the competition, which, in this case, is $7.25-an-hour Texas.
But it’s not hard to find legitimate economists who will argue the opposite; that when the minimum wage increases, the rise in unemployment is small or nonexistent; that those losses are overcome by higher earnings that ripple through the economy in the form of growth.
Arkansas, after all, borders Texas too.
Here are some numbers. You can make of them what you want.
My conclusions: Both states are riding high on a national employment boom but both have unacceptably high levels of poverty. The effect of the minimum wage differential is still open, but Oklahoma is setting itself up to be one half of the ultimate case study: $7.25 on one side of the border, $10 heading to $11 on the other.
It’s worth noting that on the Moffett side of the border, we refuse federal funding to pay for health care for our poorest citizens. Over in Fort Smith, they’ve had Medicaid expansion for six years.
Where would you be more likely to open your call center? In a time when unemployment rates are at levels close to what economists have always said are the natural minimum, the better question might be: Where would you be more likely to find good employees to operate your call center?
It also should be noted that Oklahoma’s legal minimum wage isn’t the going rate. Wal-Mart pays more. The Cherokee Nation recently raised its minimum to $11, and other tribes have taken similar steps. That answer, of course, only raises another question: If almost no one pays $7.25 an hour — does anyone seriously think a worker could survive on that wage? — why is it the state’s legal minimum?
Oklahoma hasn’t seriously considered an increase in its minimum wage in ages. In fact, the Oklahoma Legislature passed a 2014 law pre-empting cities from raising local minimum wage levels higher than the state’s level.
At the time, I saw the logic of that, and I still have a problem with the potential for one minimum in Norman and another up the road in Moore; one rate for Tulsa, a different one in Owasso and Broken Arrow ... .
But the longer we remain stuck at $7.25 an hour, the more it feels like state policy is doing less then the minimum for its poorest citizens.