The city of St. Louis passed an ordinance in 2015 to raise the local minimum wage to $10 per hour as of this May and to $11 next January. This put it well ahead of the state minimum wage in Missouri, which stands at $7.70, just slightly above the federal minimum of $7.25. However, a new Missouri law that goes into effect August 28 will override the local minimum wage increase and return St. Louis’s minimum wage to the state standard, CNN reported last week:
The Missouri General Assembly passed a law earlier this year that prohibits local governments from setting a higher minimum wage than what the state requires. St. Louis Mayor Lyda Krewson, a Democrat, called its passage in May “a setback for working families.” …
Missouri Governor Eric Greitens took a stance in the minimum wage debate, but didn’t sign the bill into law. It will go into effect next month regardless. The Republican governor said the St. Louis ordinance that raised the minimum wage will “kill jobs, and despite what you hear from liberals, it will take money out of people’s pockets.”
To support his argument against the higher wage floor, Greitens cited a recent study by economists at the University of Washington, which found that a jump in Seattle’s minimum wage from $11 to $13 an hour last year ended up reducing low-wage workers’ incomes by an average of $125 per month due to cuts in their hours. Opponents of higher minimum wages have jumped on this study as evidence that they do more harm than good, but critics have found flaws in the study’s methodology and pointed out that it conflicts with most other research on the impact of minimum wage hikes.
The Missouri legislature’s minimum wage cap is the latest in a trend of Republican-led statehouses passing preemption laws to prevent municipal governments in more liberal-leaning cities from creating local employment regulations such as minimum wages, overtime rules, paid sick leave mandates, and bans on salary history inquiries. In addition to St. Louis, Missouri’s new law will also affect Kansas City, where voters are scheduled to decide in a referendum in August whether to raise the minimum wage to $15 an hour by 2022.
Of course, a decline in the minimum wage does not obligate employers to cut wages, which tends to depress employee morale and generate bad press. Some local employers tell the St. Louis Post-Dispatch that even though they had opposed the hike, they planned to leave their minimum-wage workers’ raises in place, and a campaign is underway to encourage employers not to cut pay:
Andy Karandzieff, owner of Crown Candy Kitchen, was an outspoken opponent of the ordinance and was frustrated that he had to pay higher wages for his two minimum wage employees who are still in high school. However, he said he is not going to lower their pay rates even after the ordinance is repealed. He said he’s uncertain if he’d pay new employees $10 per hour. … After the St. Louis minimum wage ordinance passed, [Michael Meuser, owner of Pogue Label & Screen,] decided to cut back on hiring temps. But he says he has no plans to roll back the $10 pay for entry-level positions.
On Friday, a coalition of groups, including Show Me $15, Missouri Jobs with Justice and others, plans to launch a petition drive to encourage local employers to keep paying at least $10 an hour. Businesses that agree to keep the minimum at $10 will be lauded on the campaign’s website and can display signs showing their support. Employers that refuse may face protests and possible boycotts, organizers with the “Save the Raise” campaign told The Associated Press.
Meanwhile, some low-income workers in the city are obviously distraught at the prospect of having their recent gains reversed, as Clio Chang reports for the New Republic. Chang adds that, according to one study, St. Louis wages have gone up, factoring in rising housing costs, for white-collar workers, but dropped for blue-collar workers—a disparity the higher minimum wage would have helped offset.