Missouri Proposes increase in minimum wage

Missouri lawmakers have proposed a bill for November’s election to gradually raise the state’s minimum wage to $12 per hour by 2023. If passed, this would affect a large number of Northwest student employees.

A minimum wage increase is on the Missouri ballot for the Nov. 6 election.

The ballot measure, if passed, will raise the state minimum wage to $8.60 next year. It will then increase it by 85 cents every year until 2023, where it will reach $12 an hour.

Assistant Professor of Economics Tolina Fufa said while the increase has disadvantages, the disadvantages are small compared the the potential positive.

“The argument against the minimum wage is it puts some businesses at a compettive disadvantage,” Fufa said. “If it’s true, the unemployment rate could increase in a few pockets. But when you look at the overall data, you do not have an empirical finding that supports their claim.”

Fufa also argued that there are some advantages for business.

“This helps the business because the turnover rate decreases,” Fufa said. “In some restaurants, the turnover is 70 to 90 percent a year. When people are paid well, they get to stay there longer, so it reduces the cost of hiring and training workers.”

In addition to turnover cost burden on businesses, Fufa also believes that the increase in minimum wage will reduce government spending because less people will be under the poverty line.

“Let’s say the businesses are successful and they do not raise the wages, what about the living standards of your workers,” Fufa said. “If your workers are not paid well, if they are under the poverty line, they will not be as productive. The government has to pay more money to assist them and cover their basic necessities.”

Maryville Rapid Elite owner and President of the Board of Downtown Maryville Matt Gaarder said the potential change creates concern for smaller towns like Maryville.

“It would have a pretty major impact. Right now we have four part-timers that are making above minimum wage, but well under $12. None of them are over $10,” Gaarder said.

With the increase in minimum wage, Gaarder worries that he may have to cut those part-time positions.

Another concern Gaarder has is, with the increase in minimum wage, he may have to increase prices on his products.

“One of the things, since I’ve been in business since 2010, we’ve been able to avoid doing is raising prices on any of our products,” Gaarder said. “That would be something that would have to be considered.”

Compared to surrounding states, Missouri is ahead of Iowa and Kansas, who both have a minimum wage of $7.25. Missouri trails Nebraska, which is at $9.

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