Jordan Candler / August 31, 2017

Missouri Takes Action Against Minimum Wage Hike

St. Louis’ $10 hourly wage is no more thanks to action by the state legislature.

There are plenty of problems that emerge when lawmakers increase the minimum wage. Look no further than Seattle, where low-income workers’ paychecks are getting skinnier, not bigger. The Missouri legislature understands this adverse economic effect and approved in May a bill to scale back St. Louis’ $10 hourly wage by capping it at $7.70 across the state. On Monday the law automatically became official (more on that below). However, this case is a bit of a novelty in that the new state law, in addition to preempting minimum wage increases, also nullifies an existing ordinance in St. Louis.

Democrats in that city and in the state legislature worked hard to implement and safeguard the $10 hourly wage, but it ultimately didn’t matter. The rationale for the Republican legislature’s action isn’t necessarily about opposition to higher wages. Rather, Republicans are rightly making a statement via the law that local jurisdictions cannot abrogate the new state-wide minimum wage benchmark. The purpose is to create across-the-board stability that ultimately provides for a more business-friendly environment. In the future, this means that those lobbying for a minimum wage increase need to convince the state legislature, not the local city council, to make it happen.

Truth be told, the way the whole situation played out could have been better. This is reflected in the remarks of Missouri Republican Gov. Eric Greitens, who allowed the bill to become law without his signature. Greitens stated: “We have different wages across the state. It’s created uncertainty for small businesses. And it all could have been avoided if the politicians had done their job on time. I disapprove of the way politicians handled this. That’s why I won’t be signing my name to their bill.” That’s his way of telling lawmakers that it’s a situation of their own doing and to quit messing around. And as for those claiming the sky is falling — and there are plenty of them — most companies won’t renege on the $10 hourly wage anyway, which is to say most workers will continue to make more than the new minimum wage.

And a bit of irony, courtesy of Reason’s Christian Britschgi: “A bit more puzzling is why politicians and the media are lavishing special attention on a bill that offers only the potential for worker wage reductions, when laws that certainly reduce their wages escape mention. These laws are called taxes, and most pass without nearly the kind of scrutiny from politicians or national media.” St. Louis has had its fair share of additional tax burdens levied on its residents by the very lawmakers who are demanding higher wages. If only their constituents could articulate the paradox.

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