From the Editor

Blame political leadership void for likely state minimum wage hike

The Missouri Chamber of Commerce and Industry made the right move by staying out of the campaign against the proposed state minimum wage increase and opting to distance itself from what likely is a losing battle.

Thanks to the lack of leadership in the Missouri General Assembly and the U.S. Congress, the issue now will be in the hands of the public, which probably will support a wage-hike measure that includes indexing — annual increases to account for inflation. Voters in Missouri will decide Nov. 7 whether to raise the minimum wage from $5.15 an hour, the federal minimum, to $6.50, with annual hikes.

State and federal legislation defeated in past years called for minimum wage increases without indexing — which would have created a smaller burden on business owners than what the current proposal calls for.

Polls show Missourians favor the current proposition by a 3-1 margin, and the Give Missourians a Raise Coalition compiled a petition with more than 200,000 signatures to get the initiative on the ballot.

Twenty-two states, including neighbors Illinois and Arkansas, already have raised the minimum wage.

A group called Save Our State’s Jobs has formed to oppose the proposal, and its members include Associated Industries of Missouri, the Missouri Restaurant Association, the Missouri Retailers Association, the Missouri Grocers Association, the Missouri Health Care Association and the Missouri Merchants and Manufacturing Association.

While it opposes a minimum wage increase, the state chamber decided in mid-August to stay out of the SOS Jobs coalition and avoid participating in the campaign.

SOS members are not only bucking popular opinion; they’re seeing current events work against them. A recent economic report shows that the median hourly wage for U.S. workers has declined 2 percent since 2003, after factoring in inflation, even while productivity rose steadily during the same period. The federal minimum wage is now less than $4 in 1996 currency.

Representatives of the Give Missourians a Raise coalition say the initiative would provide 256,000 people with a pay raise and pump $21 million into the state economy.

But SOS Jobs released a study by a research organization that estimates the wage increase to $6.50 an hour would hurt many minimum-wage workers. The study, done by a Florida State economist and sponsored by Employment Policies Institute, said it would lead to the loss of 1,552 jobs in Missouri because businesses would lay off some workers so they could afford to pay the higher wage to other employees.

The claims on the SOS Jobs Web site have more dire predictions, saying the minimum wage hike could “cripple our state’s small businesses, drive up consumer costs and halt Missouri’s recovery… Raising Missouri’s minimum wage higher than surrounding states guarantees these jobs will never be regained.”

While that seems hyperbolic, the annual indexing for inflation could push Missouri’s rate above the rates of Illinois and Arkansas, and Kansas has not raised its minimum wage. The dire situation that opponents portray could have been avoided with responsible political leadership.

The U.S. Congress had numerous chances to inoculate businesses against significant state-by-state minimum wage raises that include the dreaded indexing, but the legislators declined

to act. The Missouri General Assembly also has had chances to provide for responsible increases in the minimum wage and also has failed to act.

But there is still an outside chance that Congress will pass an increase in the minimum wage that would take away support for the Missouri initiative.