Minimum wage increases were passed by Missouri voters on November 6 by a nearly 25% margin. What does it mean for workers and employers?
The provisions of Proposition B will make the current minimum wage of $7.85 per hour in Missouri increase to $8.60 per hour, beginning on January 1, 2019. On January 1 of each year following for the next four years, the minimum wage will increase incrementally–$9.45 per hour in 2020; $10.30 per hour in 2021; $11.15 per hour in 2021 and $12.00 per hour in 2023. Proposition B will also require further cost of living increases in the minimum wage after 2024, indexed to inflation.
Government employees are exempted from the minimum wage increase and Proposition B also increases penalties for employers that do not comply with the increases that will be mandated in the state constitution.
Proponents Say No Full-Time Worker Should Live in Poverty
Proponents of minimum wage increases have always argued that the minimum wage should be a livable wage through which workers can earn enough for basis living expenses.
Before the election, Richard Von Glahn−who was organizing director of Missouri Jobs for Justice made–their case on St. Louis Public radio as reported by Xandra Ellin.
“You should not be telling a full-time worker…that they are only worth $314 a week, $16,000 a year. That is simply not enough to survive on in any community in this state.” Von Glahn further argued higher wages will cause workers to spend more money to drive economic growth. “No one who works full-time should be expected to live in poverty,” he added.
A LOOK AT HOW THE MINIMUM WAGE WORKS, AND DOESN’T WORK
Employers Say Mandate Will Force Them to Reduce Entry Level Jobs
Business organizations and leaders who opposed an employer mandate to increase the minimum wage by 50% emphasize that the minimum wage was never intended to be a livable wage, but an entry level wage. Employers have relied on the lower minimum wage to hire first time employees, such as high schooler, into the work force and as a way to keep the cost to do business affordable and stay in business.
Ray McCarty−President and CEO of Associated Industries of Missouri−offered commentary in The Missouri Times on November 9th about the employer/employee impact of Proposition B.
“Employers will need to cut hours or the number of minimum wage jobs…Also, kiosks, self-checkout machines and similar automation becomes more attractive as labor costs rise, so look for an increase in the number of machines replacing lower wage workers.”
Many employers have offered starting pay at hourly rates much higher than the present minimum wage of $7.85 an hour. Surveys of employers have often found that they cannot attract and retain reliable and productive employees without paying in a range of at least $10.00 to $15.00 an hour already.
For those employers who already pay $12.00 or more, the constitutionally mandated increases in the minimum wage will not have an impact on their businesses. For other employers, the increases in the minimum wage could have an adverse impact on some employers and employees.
McCarty said that employers may be forced to increase costs of goods and services, which he predicted “could lead to inflation that also ends up hurting lowest wage workers the most.”
The biggest danger to low-wage employees is they may lose their jobs altogether. Wages are the highest form of overhead most businesses have. When wages go up by 50% over several years, without an accompanying increase in sales or profits, business choose to make cuts to the workforce.
–Metro Voice staff