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Minimum Wage Goes Up In Missouri. But Is It Too Much Or Not Enough?

Workers demonstrate in support of a higher minimum wage.
Bill Greenblatt | UPI

Missouri’s minimum wage will go up 15 cents as of New Year’s Day.

The increase from the current $7.50 to $7.65 is the result of a 2006 ballot referendum tying the state’s minimum wage to the Midwest Consumer Price Index. It’s the second 15 cent increase in as many years.

The Missouri Retailers Association lobbied against the initiative eight years ago. But its president, David Overfelt, said the increase in wages since then have been smaller than what was anticipated. He attributes that largely to the Great Recession. Still, Overfelt said business owners are not inclined to take a bite out of their profits to meet the wage increase. Instead, there will likely be higher prices for consumers or fewer employee benefits for workers, he said.

"The public is going to pay for it one way or the other. Or the workers are going to pay for it," Overfelt said.

Yet some business owners see a minimum wage hike as good for their businesses and good for the economy. Lew Prince, the co-owner of the record store Vintage Vinyl in the Delmar Loop, has been an outspoken supporter of a higher hourly wage. Prince said part-time employees at his store make more than $9 an hour, and full-time employees make more than $10.

"What we know is that the people who work for us have to make a living," Prince said. "They have to be able to live on what they make in order to be happy to work here, to be good employees, to treat my customers right."

The federal minimum wage

On Jan. 1, 29 states will have higher minimum wage rates than the federal level of $7.25. (Missouri is among nine states raising the wage because of indexing, while 18 others are going up because of ballot initiatives or legislative action.)

This year there was an effort in the Senate to raise the hourly minimum to $10.10, but it was staunchly opposed by Republicans. Prince was among business owners around the country who signed the Business For a Fair Minimum Wage pledge.

"I think it’s unfair for a human being to put in a 40 hour week and not be able to support themselves and their family," Prince said. "It’s really good for the economy and small business. When you hand someone $2 or $3 an hour, who’s only making $7.50, it goes right back into the economy."

David Overfelt argued such an increase would mean fewer jobs, especially for young workers or those with fewer skills. He said at $10 or more companies may look at ways to replace workers with machines or go overseas.

"This is a world-wide economy today, and it will just impact jobs," he said. "Minimum wage is what it is. It’s for people with low skills to get into the workforce. Anyone who has the ability and is a good worker is going to move way beyond minimum wage in their lifetime."

Pie in the sky?

Meanwhile,  throughout 2014 protests were held by fast-food workers in St. Louis and around the country demanding $15 an hour.

"I don’t know what is too much," said Prince. "My dad used to do a little union organizing in the ‘40s and ‘50s, and he always said you have to ask for more than you’re going to get."

While Missouri’s latest increase is still a long way from $15 an hour, cities including Chicago, Seattle and San Francisco will see wages increase to $10 or more in 2015. (Chicago’s rate will increase to $10 in July and to $13 by 2019.)

Overfelt, with the Missouri Retailers Association, predicts some businesses will look to get out of areas where higher wages are required.

"That would cause a number of businesses to really rethink where they’re located in those little pockets or they’d have to take a hard look at their pricing structure and their modernization and probably look at ways to shed workers to stay in business and stay competitive," he said.

Either way, if the economy keeps improving and consumer prices rise, Missouri will see its minimum wage rise again next year.

Follow Maria on Twitter: @radioaltman

Maria is the newscast, business and education editor for St. Louis Public Radio.