The new year means an increase to Missouri's minimum wage, but not all business owners are on board.
Starting Jan. 1, the minimum wage will increase from $7.85 an hour to $8.60. The raise comes after voters approved Proposition B in November, which calls for boosting the state’s minimum wage to $12 an hour by 2023. Although Prop B passed by a wide margin, business owners remain divided over whether the increase will ultimately benefit Missouri workers.
St. Louis business owner Joe Edwards, who supports the higher wage, said it’s important to him to treat workers with “respect and consideration.”
“A person can’t survive on $7.85 an hour, even if they work two and sometimes two and a half jobs,” Edwards said. “We need to give everyone the chance, if they’re willing to work hard, to live the American dream and support their family.”
Edwards owns a number of St. Louis businesses, including Blueberry Hill, the Pageant and the Tivoli Theatre, and estimates he has about 500 employees.
For now, he said, the higher wage won’t affect him, because he already pays his workers at least $10 an hour.
Edwards will have to boost employee pay to meet the $12 minimum in a few years, but he said he’s not concerned. Instead, he believes the higher wages will stimulate the local economy.
“The wonderful thing about paying people a fair wage is that they will spend it and they’ll spend it locally,” he explained. “And that’s critical for St. Louis.”
But Ray McCarty, president and CEO of Associated Industries of Missouri, disagrees, arguing a minimum wage increase doesn’t “make money magically appear.”
“That money’s going to come from somewhere,” McCarty said. “It’s either going to come from all of us as consumers or it’s going to come in the form of reduced hours and reduced positions at the minimum wage.”
It’s also possible, he argued, that businesses may begin to invest in automation that can take the place of certain low wage workers.
Rather than boosting the minimum wage, McCarty said the state should invest in training programs that prepare workers for more skilled jobs.
“If government wants to get involved in trying to help people at the lowest end of the wage scale, the best thing they can do is provide training,” he said. “Not only would [workers] be getting an immediate boost in their income, they’d have a skill that they could take anywhere.”
Missouri’s current $7.85 minimum wage is slightly higher than the federal average of $7.25, which has not increased since 2009.
Voters last approved an increase to the state minimum wage in 2006.
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