Missouri Reverses Minimum Wage Increase in St. Louis from $10 to $7.70
On August 28, a new Missouri law went into effect, banning cities from setting their own minimum wage laws, effectively overriding the city of St. Louis’ Minimum Wage Ordinance that took effect May 5, dropping the city minimum wage from $10 to $7.70 overnight.
While some local business owners are celebrating the reversal of the St. Louis Minimum Wage Ordinance, an estimated 35,000 St. Louis workers will experience a pay cut of more than $2 per hour unless businesses uphold the previous minimum wage. In a statement on the minimum wage preemption, St. Louis Mayor Lyda Krewson calls the law “a setback for working families.”
The ordinance faced significant controversy when it was first passed in 2015 and was held up in court for two years by business groups who sued. However, eventually, the Missouri Supreme Court ruled to uphold the ordinance, stating that the city acted within its charter authority when it approved the hike, and the ordinance took effect on May 5, 2017, at a rate of $10 per hour, set to become $11 on Jan. 1, 2018.
The victory was short-lived, however, as just days later on May 12, the Missouri General Assembly approved legislation in May that would prohibit local governments from raising their cities’ minimum wages above the state level (now $7.70).
The bill became law on August 28th, and three months after being phased in, the minimum wage has dropped to $7.70. State Senator Dan Hegeman, a Republican from rural northwest Missouri, says the higher minimum wage would have been detrimental to both employers and employees, commenting that the higher wage would have forced some employers to cut jobs or even move.
“You end up having fewer jobs and you do a disservice to the workers,” Hegeman said. “In my heart of hearts, I really think it hurts people in the long run.”
Republican Governor Eric Greitens expressed a similar sentiment, commenting that the raised minimum wage would “kill jobs, and despite what you hear from liberals, it will take money out of people’s pockets.”
St. Louis leaders and legislators who pushed for a higher minimum wage are expressing frustration in the state legislature’s ability to preempt cities from enacting their own minimum wage.
“I am disappointed to learn of the passing of the Republican-led bill that strips cities of their authority to fight poverty. States should not interfere with a city’s right to set a minimum wage,” said Kansas City Councilman Jermaine Reed.
25 states have minimum-wage preemption laws that allow state legislatures to undercut local legislation, preventing measures like the St. Louis Minimum Wage Ordinance from taking effect.