St. Louis minimum wage to drop from $10 to $7.70 an hour

Bucking the trend of raising the minimum wage, Missouri lawmakers passed a bill that would standardize minimum wages across the state. This means that on August 28, St. Louis, which had raised its minimum wage to $10 an hour, must lower it to the state level of $7.70 an hour.

Governor Eric Greitens will not sign the bill, but it will become law after a constitutionally mandated time period. 

Still to be discovered: Will St. Louis businesses cut the wages of their workers earning the higher wage?

St. Louis Post-Dispatch:

Minimum wage workers in St. Louis are making $10 an hour after winning a two-year legal fight against business groups who challenged a 2015 city ordinance authorizing an increase.

Under that city law, the wage was set to rise again in January to $11 an hour, then increase annually with inflation.

"It will kill jobs," Greitens said of the increase. "And despite what you hear from liberals, it will take money out of people's pockets."

Both workers and businesses alike now face a jarring change ahead. It's unclear whether many businesses as of Aug. 28 will seek to reduce pay to employees who have recently received increases.

It's a situation the Missouri House had sought to avoid by fast-tracking its version of the bill to the Senate in March, in the hopes it could be signed into law before a court's injunction on the increase was lifted in St. Louis. But the Senate didn't take up the bill until the final hours of the 2017 legislative session.

Greitens, who has clashed with senators numerous times since assuming office, said the uncertainty for businesses could have been avoided if they had "done their job on time."

His reasoning for not signing the bill outright? Those career politicians, Greitens said.

"Politicians in the Legislature could've come up with a timely solution to this problem. Instead, they dragged their feet for months," Greitens said in a statement. "Now, because of their failures, we have different wages across the state."

It's far more difficult to pass controversial legislation in the Missouri Senate than it is the House because individual senators on both sides of the aisle have the power to filibuster bills they don't like.

Senate Democrats managed to stall passage of the minimum-wage measure until the last day of session, when GOP leaders finally used a procedural move they often avoid to force a vote.

"I disapprove of the way politicians handled this," Greitens said. "That's why I won't be signing my name to their bill."

I doubt that too many businesses will actually cut the wages of their workers to reflect the new minimum.  Even more expensive than a high minimum wage to many businesses is employee turnover.  A business that constantly has to train new workers will spend more in the long run than it would simply on wages.

But the cut is good news for young people in St. Louis.  A minimum wage of $7.70 an hour puts them back in competition for jobs.  A reasonable starting wage will encourage businesses to hire those who suffer most when the minimum wage is too high: youths with little or no work experience.  Never designed to be a "living wage," the minimum wage will allow younger people to get valuable work experience and eventually move up the economic ladder.

Perhaps the transition to the lower wage could have been handled better by the Missouri legislature.  But the fact that they bucked the trend to higher wages should be emulated by other states who are finding the $15 an hour minimum wage a disaster.

Bucking the trend of raising the minimum wage, Missouri lawmakers passed a bill that would standardize minimum wages across the state. This means that on August 28, St. Louis, which had raised its minimum wage to $10 an hour, must lower it to the state level of $7.70 an hour.

Governor Eric Greitens will not sign the bill, but it will become law after a constitutionally mandated time period. 

Still to be discovered: Will St. Louis businesses cut the wages of their workers earning the higher wage?

St. Louis Post-Dispatch:

Minimum wage workers in St. Louis are making $10 an hour after winning a two-year legal fight against business groups who challenged a 2015 city ordinance authorizing an increase.

Under that city law, the wage was set to rise again in January to $11 an hour, then increase annually with inflation.

"It will kill jobs," Greitens said of the increase. "And despite what you hear from liberals, it will take money out of people's pockets."

Both workers and businesses alike now face a jarring change ahead. It's unclear whether many businesses as of Aug. 28 will seek to reduce pay to employees who have recently received increases.

It's a situation the Missouri House had sought to avoid by fast-tracking its version of the bill to the Senate in March, in the hopes it could be signed into law before a court's injunction on the increase was lifted in St. Louis. But the Senate didn't take up the bill until the final hours of the 2017 legislative session.

Greitens, who has clashed with senators numerous times since assuming office, said the uncertainty for businesses could have been avoided if they had "done their job on time."

His reasoning for not signing the bill outright? Those career politicians, Greitens said.

"Politicians in the Legislature could've come up with a timely solution to this problem. Instead, they dragged their feet for months," Greitens said in a statement. "Now, because of their failures, we have different wages across the state."

It's far more difficult to pass controversial legislation in the Missouri Senate than it is the House because individual senators on both sides of the aisle have the power to filibuster bills they don't like.

Senate Democrats managed to stall passage of the minimum-wage measure until the last day of session, when GOP leaders finally used a procedural move they often avoid to force a vote.

"I disapprove of the way politicians handled this," Greitens said. "That's why I won't be signing my name to their bill."

I doubt that too many businesses will actually cut the wages of their workers to reflect the new minimum.  Even more expensive than a high minimum wage to many businesses is employee turnover.  A business that constantly has to train new workers will spend more in the long run than it would simply on wages.

But the cut is good news for young people in St. Louis.  A minimum wage of $7.70 an hour puts them back in competition for jobs.  A reasonable starting wage will encourage businesses to hire those who suffer most when the minimum wage is too high: youths with little or no work experience.  Never designed to be a "living wage," the minimum wage will allow younger people to get valuable work experience and eventually move up the economic ladder.

Perhaps the transition to the lower wage could have been handled better by the Missouri legislature.  But the fact that they bucked the trend to higher wages should be emulated by other states who are finding the $15 an hour minimum wage a disaster.

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