State lawmakers in Missouri just undercut wages for 38,000 workers in St. Louis
Last week, Missouri’s governor announced that he will let a preemption law take effect, prohibiting cities from requiring a minimum wage higher than the state’s—nullifying the city of St. Louis’s minimum wage ordinance and effectively lowering the city’s minimum wage from $10 down to $7.70. With this law, lawmakers have potentially undone raises for roughly 31,000 workers in St. Louis who received a raise when the city’s ordinance took effect in May, and likely stopped scheduled raises for those same 31,000 workers plus another 7,000 workers, for a total of 38,000 workers who would have gotten a pay increase when the city’s minimum wage was scheduled to rise to $11 an hour in January. (Minimum wage increases typically also lead to raises for workers slightly above the new minimum wage. The estimates here do not include these “spillover” effects.)
In 2015, the St. Louis city council and mayor approved a minimum wage ordinance, which would have gradually raise the city’s minimum wage to $11 per hour by January 2018. A protracted legal dispute delayed implementation of the ordinance until this past spring, but on May 5th, the ordinance finally took effect, raising the city minimum wage to $10 per hour. Now the city’s minimum wage will lose effect on August 28th, and the wage floor for workers in the city will fall back to the state minimum wage of $7.70.
It is impossible to know how many of the 31,000 St. Louis workers who were directly affected when the city’s minimum wage rose from to $10.00 will now see their pay cut, but some may. Workers can only hope that their employers will not roll back their raises. For some, that raise may have been the key difference in affording a new apartment rental, car payment, or similar long-term financial commitment. In any case, anyone starting out in the St. Louis workforce, or any low-wage worker considering changing jobs, is likely to find that most opportunities pay less than they would have had the ordinance remained in effect.
The table below shows the demographic characteristics of the workers whose raises are now in jeopardy. The majority of affected workers are women (56 percent) and the overwhelming majority (over 90 percent) are adults, age 20 or older. The majority of these workers work full time. More than one in four have children. In fact, state lawmakers have now jeopardized pay that supports nearly 23,000 children in the St. Louis area, whose parents would have gotten a raise to $11 next January. By definition, these workers are the lowest paid workers in the St. Louis economy. Roughly half are either in poverty or living with family incomes less than 200 percent of the poverty line.
Missouri state lawmakers are undercutting raises for 38,000 workers: Workers affected by St. Louis minimum wage increase to $10, and projected under scheduled increase to $11
|Increase to $10 (May 5, 2017)||Increase to $11 (scheduled for Jan 1, 2018)|
|Category||Estimated workforce||Directly affected||Share of category||Share of affected workers||Estimated workforce||Directly affected||Share of category||Share of affected workers|
|Age 20 or older||246,700||28,400||11.5%||91.9%||247,000||35,700||14.5%||93.2%|
|Less than 25||26,100||9,700||37.2%||31.4%||26,100||10,600||40.6%||27.7%|
|25 to 39||92,300||11,700||12.7%||37.9%||92,400||15,600||16.9%||40.7%|
|40 to 54||82,000||4,900||6.0%||15.9%||82,100||5,900||7.2%||15.4%|
|Age 55 or older||51,500||4,700||9.1%||15.2%||51,500||6,200||12.0%||16.2%|
|Black or African American||77,400||15,000||19.4%||48.5%||77,500||19,600||25.3%||51.2%|
|Hispanic, any race||7,400||1,400||18.9%||4.5%||7,400||2,000||27.0%||5.2%|
|Asian or other race/ethnicity||10,500||1,500||14.3%||4.9%||10,500||1,800||17.1%||4.7%|
|Less than high school||12,800||3,600||28.1%||11.7%||12,800||4,400||34.4%||11.5%|
|Some college, no degree||59,500||10,200||17.1%||33.0%||59,600||11,000||18.5%||28.7%|
|Bachelor’s degree or higher||101,000||3,500||3.5%||11.3%||101,200||4,700||4.6%||12.3%|
|Married, no kids||46,800||3,300||7.1%||10.7%||46,800||4,100||8.8%||10.7%|
|Single, no kids||106,000||19,600||18.5%||63.4%||106,100||23,600||22.2%||61.6%|
|Part time (< 20 hours per week)||10,300||2,100||20.4%||6.8%||10,300||2,100||20.4%||5.5%|
|Mid time (20–34 hours per week)||30,400||10,900||35.9%||35.3%||30,400||11,900||39.1%||31.1%|
|Full time (35+ hours per week)||211,200||18,000||8.5%||58.3%||211,500||24,200||11.4%||63.2%|
|Missing poverty status||1,300||500||38.5%||1.6%||1,300||500||38.5%||1.3%|
|Less than $25,000||23,000||8,900||38.7%||28.8%||23,000||9,400||40.9%||24.5%|
|$25,000 – $49,999||47,200||9,200||19.5%||29.8%||47,300||12,700||26.8%||33.2%|
|$50,000 – $74,999||53,100||6,600||12.4%||21.4%||53,100||8,800||16.6%||23.0%|
|$75,000 – $99,999||35,700||2,400||6.7%||7.8%||35,800||3,000||8.4%||7.8%|
|$100,000 – $149,999||50,400||1,700||3.4%||5.5%||50,500||2,100||4.2%||5.5%|
|$150,000 or more||42,500||2,100||4.9%||6.8%||42,600||2,200||5.2%||5.7%|
|Children with at least one affected parent||145,500||18,900||13.0%||145,700||22,700||15.6%|
Note: Estimated workforce describes employed ACS respondents ages 16 and older for whom a valid hourly wage can be determined, and who reported working in the city of St. Louis, regardless of their place of residence. Directly affected workers are those that would otherwise have had hourly wages below the specified wage value. Totals may not sum due to rounding.
Source: EPI analysis of American Community Survey microdata, 2015
The lawmakers who passed this legislation, and the governor who let it become law, claimed—as opponents do every time that a higher minimum wage is proposed anywhere—that St. Louis’s higher minimum wage would hurt job growth in the city. This is one of the most well-studied questions in economics, and the bulk of evidence from decades of research has shown that minimum wage hikes have had little to no effect on employment. Research on city-level minimum wages has reached the same conclusion: city minimum wage increases raised pay for workers with negligible impacts on job growth.
Unfortunately, the practice of Republican state lawmakers undoing the will of urban voters and their duly-elected representatives in city government is a growing trend. This smacks of hypocrisy from a party that typically champions the idea of local control—except when such control gives ordinary workers a stronger voice or greater bargaining power with their employers.
City governments are stepping in to enact higher minimum wages primarily because other levels of government have been negligent on this issue. Pay has been falling for low-wage workers for decades because of federal and state lawmakers’ failure to more adequately raise minimum wages. At $7.25 an hour, the federal minimum wage is now worth 25 percent less than it was worth at its high point in the late 1960s. Missouri’s $7.70 state minimum wage is 20 percent below this peak.
If state legislators do not want a gap between the minimum wage in St. Louis and the rest of the state, rather than undoing the higher standard that St. Louis set for itself, they should simply raise the state minimum wage. It is certainly long overdue.