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Conservative Arkansas could soon have the highest effective minimum wage in the country

Will the new minimum wage be a job killer?  Nobody knows.

Arkansas is likely to have the highest effective minimum wage in the country soon, setting up a grand experiment in whether a high minimum wage in a poor state can raise workers out of poverty — or derail the state’s economy.

Voters in Arkansas on Election Day overwhelmingly approved a minimum-wage increase to $11 an hour by 2021. 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, 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.

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.

Now, Arkansas has set up a large-scale test case: Will the pay hike lift people out of poverty in the sixth poorest state? Or will it be a “job killer” as popular Republican Gov. Asa Hutchinson warned? About 300,000 workers are expected to get raises because of the changes.