Proposition B asks voters to raise minimum wage in Missouri

Sunday, October 29, 2006

By SCOTT MOYERS

Southeast Missourian

For years, Tim Weatherly paid his Southeast Missouri State University student employees the bare minimum -- $5.15 an hour. But the regional district manager for Chartwells, which operates the university's dining facilities, found staying competitive increasingly difficult as employees opted to take jobs at a higher rate of pay.

So last year, he lobbied Chartwells' executives to pay the workers more. He won, getting their starting rate of pay pumped to $5.55.

"I was able to negotiate to do this bump," Weatherly said. "You have to be competitive in the market. And it's hard to keep good help. It was also a way of rewarding the employees."

That's exactly the same way those behind Proposition B feel. Proposition B, on the Nov. 7 ballot in Missouri, will ask voters to consider raising the state's minimum wage from $5.15 to $6.50.

A "yes" vote would amend Missouri statutes to increase the state minimum wage rate to $6.50 an hour, or to the level of the federal minimum wage, whichever is higher. And then every year after that, the minimum wage rate would be adjusted in accord with the Consumer Price Index.

Proponents of the proposition, specifically the group Give Missourians A Raise, which got the issue on the ballot, cite a report from the nonpartisan Economic Policy Institute suggesting that 256,000 Missourians will receive a raise if Proposition B passes.

"The fact is that no one can survive on $5.15 an hour," said Sara Howard, a spokeswoman for Give Missourians A Raise.

An estimated $3.3 million to $4.3 million more will be generated every year for state revenue through sales taxes on increased spending and income taxes, Howard said.

Cape Girardeau Chamber of Commerce president and CEO John Mehner has a different view. The chamber board voted unanimously earlier this month to not support the proposition.

The problem, Mehner said, isn't just increasing the minimum wage, but an "automatic escalator clause" based on the Consumer Price Index, which is one way the government measures the level of inflation.

"If this escalator clause was in place 10 years ago, the minimum wage today would be $8.70 an hour," he said. "That's bad business."

Most minimum-wage salaries are there for a reason, he said, mainly for entry-level, part-time positions.

"That automatic escalator is forever and ever," he said. "If a company has bad years, which they do, it doesn't take that into account. Those are unforgiving escalating costs that will end up taking away jobs."

Recent studies commissioned by the Show-Me Institute, a St. Louis-based think tank, make arguments that in a pure free market, increases in the minimum wage stunt job growth by forcing small businesses to do more with less or creating incentives for automation, thus leading to net job losses.

"Just like Alan Greenspan said, the reason I object to the minimum wage is it destroys jobs," Mehner said. "The evidence is overwhelming."

Asked whether people don't deserve to make more money, Mehner cringed.

"It's not 'deserve'," he said. "Don't put it into 'deserve.' You deserve what the market will pay based on your skills in your position in your part of the country. It's called demand, and it's certainly not about 'deserve.'"

Mehner worries that the automatic accelerator isn't a well-known part of the issue.

"People think they're just voting on raising the minimum wage," he said. "... Overall, I think the immediate impact would be slim, but I think the long-term impact would be bad. Loss of jobs. Denied opportunities."

The federal government last raised the minimum wage in 1997. Missouri gained jobs and saw its unemployment rate drop afterward. In the two years following the last minimum wage increase, Missouri added 90,400 jobs to its rolls. During that same time period, unemployment in Missouri dropped from 4.3 percent to 3.1 percent, according to the U.S. Bureau of Labor Statistics.

smoyers@semissourian.com

335-6611, extension 137

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