As the fight to raise the minimum wage gains ground all over the US, it suffered a serious setback in St. Louis.
On August 28, the city’s minimum wage of $10 an hour will drop to $7.78 an hour.
To make matters worse, the St. Louis minimum wage was set to increase to $11 an hour in January. That anticipated raise is now off the table as well.
The pay cut for more than 35,000 St. Louis low-wage workers is the result of new law recently passed by the Missouri Legislature.
The new law prohibits local governments from passing ordinances that set the minimum wage higher than the state minimum wage of $7.78 an hour.
Missouri Gov. Eric Greitens just before the July 4 Holiday weekend was to begin announced that he will allow the new law to go into effect on August 28.
Gov. Greitens said that local minimum wage ordinances such as the one passed by St. Louis “will kill jobs.”
But Sierra Parker, a St. Louis janitor whose wage was increased to $10 an hour in May because of the local minimum wage ordinance, said that Gov. Greitens isn’t really concerned job opportunities for workers.
“Gov. Greitens’ announcement (that he will allow the pay cut to become law) was never about Missouri’s working families,” said Parker, a member of SEIU Local 1. “It was always about lowering wages and making his rich donors happy.”
Gov. Greitens’ quaint platitude that increasing the minimum wage “will kill jobs” is nothing new.
When the US in 1938 established the nation’s minimum wage at 25 cents an hour, opponents said the same thing.
But history and research suggests otherwise.
For example, Seattle in 2014 enacted a minimum wage ordinance that raises the city’s minimum wage over a four-year period to $15 an hour.
Two studies of the impact that Seattle’s minimum wage increase have found that raising the minimum wage has had little if any impact on jobs.
One study conducted by experts at the University of California Berkeley’s Institute for Labor and Employment found that when Seattle raised the minimum wage, wages among low-income workers increased but “employment was not affected.”
Another study conducted by researchers at the University of Washington found that Seattle’s minimum wage had little impact on employment.
The University of Washington study, however, did say that the increased minimum wage caused some employers to reduce hours worked by employees.
Right-wing opponents of minimum wage laws jumped on this part of the study to criticize Seattle for raising the city’s minimum wage.
But Seattle Mayor Ed Murray praised the minimum wage increase as an important step toward reducing inequality and pointed out that the University of Washington study, “excludes 38 percent of workers who work at multi-site businesses (such as Starbucks or Target). This and other limitations are openly acknowledged by the study team members, and they do not recommend changing the law.”
Mayor Murray also said that “Seattle’s economy is thriving and our employers are competing for workers. Hotels, retailers and restaurants are scrambling to find employees.”
Seattle’s unemployment rate is 2.7 percent, well below the 4.3 percent national unemployment rate.
Back in St. Louis, low-wage workers are bracing for the impact that the looming pay cut will have on their lives.
Those making the minimum wage could see their hourly wages drop by $2.22 an hour, or $354 a month. That’s a 22 percent pay cut.
If you use the $11 minimum wage that is to go into effect in January to calculate the impact of the lower minimum wage, the pay cut is even steeper.
“The $10 minimum wage has already changed my life for the better,” said Parker. “Now, Gov. Greitens intends to take money out of the pockets of more than 35,000 St. Louis working families. For me and so many others, that means going back to living paycheck to paycheck.
“He thinks he can sneak his decision by us over the holiday, but this doesn’t change anything. Working people will keep up the fight to hold him accountable.”