Showdown in St. Louis as Newly Introduced State Law Rolls Back Minimum Wage Increases

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Missouri’s State Law Will Allow St. Louis Employers to Clip Earnings for Minimum Wage Workers

A state law introduced Monday reduces the minimum wage requirements in St. Louis from $10.00 back down to the state level of $7.70, potentially stripping away pay raises to hundreds of low-income earners.

St. Louis has become another front in the battle for minimum wage hikes that rages across the U.S. In this case, St. Louis passed a city ordinance that raised minimum wages to $10.00 two years ago, but due to court challenges and delays, wasn’t implemented until May of this year.

Now, after several months of having increased wages, the Missouri state legislature passed legislation that preempted the municipal wage level, once more allowing employers to pay their workers as low as $7.70. What makes this situation unique is that unlike in other states where the debate over wage rates continues, this is a case of a wage hike being implemented to only then be essentially revoked a few short months later. Now it falls to the discretion of the employers on whether they will reduce their employees’ earnings back down to the pre-ordinance levels.

The great debate over minimum wage raises is often undertaken by two camps. One claims that the current levels are unacceptable and do not provide a living wage for workers. Those against wage raises argue that raising pay will hurt businesses’ bottom lines and therefore lead to less job creation and fewer jobs overall. While studies have been released backing up both points of view, each side has worked to debunk or discredit the other’s data.

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But the situation in St. Louis is even more nuanced. After the wage hike was implemented in the city, minimum wage workers all saw their collective earnings increase. As such, individual businesses will now have to choose whether they want to engage in a mass wage reduction. The reduction could have a number of consequences on the workers who had come to rely on the increase over the past months. Worse yet, the wage reduction could also breed animosity between employers and employees, potentially harming productivity and the city’s economy.

The state minimum wage puts it on the lower end of the spectrum compared to other states across the country and just a hair above the federal minimum wage of $7.25.

The Missouri minimum wage has risen slowly over the past several years, climbing $0.35 from 2013 to today.

Now workers must watch as their employers decide on how to move forward—either keeping their current payrolls at $10.00 or reverting back to $7.70.

 

Sources

City’s Minimum Wage Ordinance Remains Effective and Enforceable until August 28, 2017,” Office of the Mayor St. Louis – MO.Gov, August 28, 2017.

STATE MINIMUM WAGES | 2017 MINIMUM WAGE BY STATE,” National Conference of State Legislature, January 5, 2017.

Minimum Wage,” Department of Labor and Industrial Relations, last accessed August 29, 2017.

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