Raising The Minimum Wage In Red States

Efforts to do so look likely to succeed:

Four states have minimum-wage increases on the ballot on Tuesday, an occasion that’s notable for two reasons. All four states — Alaska, Arkansas, Nebraska and South Dakota — lean conservative, meaning that the debate over low wages and income inequality has spread beyond reliably blue parts of the country. And should these four measures pass, as they’re all expected to, a majority of states in the U.S. will soon have higher wage floors than the federal minimum.

Danielle Kurtzleben puts these initiatives in context:

As the Wall Street Journal has noted, all 10 proposed minimum wage measures on state ballots since 2002 have passed. That’s remarkable because the minimum wage is a divisive partisan issue.

When the CBO in February released a report saying that a nationwide $10.10 minimum wage would lead to a decline of around 500,000 workers, conservatives pounced and liberals went on the defensive. But despite these apparent partisan divides in the US, Republican voters aren’t entirely against minimum wage hikes. While Democrats tend to broadly support a higher wage, Republicans don’t always disagree — indeed, they’re roughly evenly split.

Ben Casselman reviews the economic debate over the minimum wage:

Economists are divided over whether these efforts are a good idea. In aworking paper released Monday, David Neumark, J.M. Ian Salas and William Wascher fired the latest salvo in a longrunning battle over the effects of raising the minimum wage. Neumark, his coathors and their allies argue raising the minimum wage leads to lost jobs; their opponents, including University of Massachusetts economist Arindrajit Dube, argue the impact on employment is minimal. A 2008 meta-study looked at 64 minimum-wage analyses and concluded that they generally found little to no impact on employment. A poll of leading economists last year found them nearly evenly divided on the question of whether a $9-an-hour minimum wage would “make it noticeably harder for low-skilled workers to find employment.”

Josh Barro compares the different measures:

The proposals differ in their particulars. Alaska would set its minimum wage the highest, with a gradual rise to $9.75 by 2016. Nebraska would go to $9 in 2016, South Dakota to $8.50 in 2015 and Arkansas to $8.50 by 2017. In Alaska and South Dakota, the minimum wage would continue to rise in line with price inflation in following years, which makes an enormous difference in the long term.

And Reihan wonders how the minimum wage hikes will play out in each state:

[W]hile the discussion of the minimum wage referendums have largely focused on what these states have in common — they’re relatively politically conservative — it hasn’t focused on the fact that among them, Arkansas is unusually poor and that its adult population has an unusually low average skill level. The consequences of a substantial increase in the local wage floor will likely have different consequences in Arkansas, in light of its history of deprivation and isolation, and where higher consumer prices associated with rising compensation costs will have more bite due to its low income levels, than in Alaska, which is considerably more affluent. And while both Nebraska and South Dakota had unemployment rates of 3.6 percent as of August, unemployment in both Alaska (6.8 percent) and Arkansas (6.3 percent) is fairly high. I can’t help but think that Arkansas is making a mistake. But better that Arkansas is making a state-level decision that, as inflation and productivity growth proceeds apace, will be less binding than new federal legislation, which will be less responsive to its particular conditions.