When Jan. 1 rolls around, Missouri’s minimum wage will increase from $13.75 to $15 an hour, putting the state ahead of many others.
The Missouri Department of Labor and Industrial Relations announced that the minimum wage is set to increase by $1.25 beginning in 2026. The minimum wage rate will be in effect for all non-exempt employers.
Missouri’s HB 567, signed by Gov. Mike Kehoe into law on July 10, repealed statewide earned paid sick time while simultaneously modifying the state’s minimum wage law.
It eliminated the automatic inflation adjustments that were set to begin in 2027 and kept the $15 per hour rate for public employers. However, it is also removing voter-approved worker protections for businesses as of Aug. 28.
Lily Roberts is the managing director of economic policy at the Center for American Progress, a nonpartisan economic policy institute. She said conversations about adjusting the minimum wage reflect rising prices that have increased in recent years.
“Everybody can tell you about inflation, and everybody can tell you about the cost of rent or groceries or childcare being really expensive, but the flip side of that is wages,” Roberts said. “There are many folks who are worse off and less able to keep up with those raising prices because a major pillar of how we make wage policy hasn’t been changed since 2009.”
The federal minimum wage is $7.25 and it hasn’t been adjusted since 2009, which Roberts said is the longest it’s gone unchanged since the introduction of minimum wage in 1938.
“$7.25 is so unbelievably low that many people don’t even believe that it’s still that low,” Roberts said.
In Missouri, employers who are involved in retail or service businesses and have an annual gross income less than $500,000 are exempt from having to pay the state minimum wage rate. Instead, those employers can pay their workers any wage at their discretion, according to the Missouri Department of Labor and Industrial Relations.
Roberts said Missouri is unique in the fact that it raised its minimum wage to reflect inflation numbers, but when the state implements a $15 an hour minimum wage, it is no longer required to factor in inflation.
Between 2015 and 2019, Missouri’s minimum wage rose just under a dollar, from $7.65 to $8.60. Since 2019, the increase has been at least $0.75 annually every year except for 2023. The $1.25 jump will be the second straight year that the minimum wage has increased by more than a dollar.
Missouri is one of 34 states that set above the national minimum wage.
Roberts said Missouri is in line with nearby states, such as South Dakota, Nebraska and Arkansas. All of those states, plus Missouri, have consistently been working on increasing their respective minimum wages.
“Some of them are doing it gradually over time to get to ($15 an hour) and others are passing individual laws,” Roberts said. “These longer-term predictable changes are really the trend right now, where you give businesses and employees a sense of how their wages will grow over time, and it means that it’s easier to predict and easier for employers to budget for.”
She said business owners are often fighting for higher wages, contrary to popular belief, because they need to be able to compete.
“The higher your wages that you pay, in general, the lower your turnover is,” Roberts said. “So businesses that pay really small dollars tend to have a lot of turnover. It actually gets really counterproductive and expensive very quickly because the business owner has to spend all of their time hiring, training and trying to retain folks.”
