Posted July 14, 2017 at 9:00 am by David Cooper

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.

Minimum wage

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
Total 251,800 30,900 12.3% 100.0% 252,200 38,300 15.2% 100.0%
Sex
Female 123,000 17,500 14.2% 56.6% 123,200 21,500 17.5% 56.1%
Male 128,900 13,400 10.4% 43.4% 129,000 16,700 12.9% 43.6%
Age
Age 20 or older 246,700 28,400 11.5% 91.9% 247,000 35,700 14.5% 93.2%
Under 20 5,200 2,500 48.1% 8.1% 5,200 2,600 50.0% 6.8%
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%
Race/ethnicity
White, non-Hispanic 156,500 12,900 8.2% 41.7% 156,800 14,900 9.5% 38.9%
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%
Education
Less than high school 12,800 3,600 28.1% 11.7% 12,800 4,400 34.4% 11.5%
High school 55,000 11,000 20.0% 35.6% 55,100 14,900 27.0% 38.9%
Some college, no degree 59,500 10,200 17.1% 33.0% 59,600 11,000 18.5% 28.7%
Associates degree 23,500 2,500 10.6% 8.1% 23,500 3,300 14.0% 8.6%
Bachelor’s degree or higher 101,000 3,500 3.5% 11.3% 101,200 4,700 4.6% 12.3%
Family status
Married parent 69,400 3,400 4.9% 11.0% 69,500 4,900 7.1% 12.8%
Single parent 29,700 4,700 15.8% 15.2% 29,700 5,500 18.5% 14.4%
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%
Work hours
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%
Poverty status
In poverty 16,400 7,400 45.1% 23.9% 16,400 7,500 45.7% 19.6%
101-200% poverty 29,900 8,900 29.8% 28.8% 29,900 11,200 37.5% 29.2%
201-400% poverty 80,400 10,200 12.7% 33.0% 80,500 13,900 17.3% 36.3%
400%+ poverty 123,900 3,800 3.1% 12.3% 124,100 5,100 4.1% 13.3%
Missing poverty status 1,300 500 38.5% 1.6% 1,300 500 38.5% 1.3%
Family income
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

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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.

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