Cape Girardeau accepts wage increase

"There will be no wavering. We will move forward and implement the increases and then have some continued budget discussion," Mayor Jay Knudtson said. "It becomes an expense that we've got to absorb, and we will."

The city previously had claimed itself exempt from the new minimum wage law passed by state voters last year.

The move will immediately affect 68 part-time workers and will have an immediate financial impact of about $20,000. City manager Doug Leslie said staff will re-evaluate the city's position in the spring and determine how to pay for the salary increase for the summer staff, which is about three times larger.

The change will have a retroactive effect for current workers.

Leslie said FY 2007 will be a challenging one. "We'll be facing a number of budget pressures, from the health insurance program to AmerenUE, to this new impact," Leslie said. He referred to AmerenUE's proposed rate increase.

"That's going to require a much closer look at the revenue expense involved," he said.

Both Leslie and Knudtson said the city will examine ways to rearrange its budget to cover the estimated $110,000 cost of the raise in 2007. The city fiscal year ends June 30, so possible measures like cutting staffing levels or increasing parks fees could occur after that date.

Proposition B passed Nov. 7 with more than 75 percent of the vote, mandating a new minimum wage for Missouri's workers. But just before Jan. 1, Cape Girardeau used a legal interpretation of the proposition backed by the Missouri Municipal League and the Missouri Association of Counties that said municipalities were exempt.

According to this reading of the law, because the statute's definition of "employer" does not list municipalities, the government bodies are exempt. Cape Girardeau also believes its status as a "home rule charter city" grants it autonomy.

The Missouri Division of Labor Standards within the Department of Labor and Industrial Relations is charged with enforcing labor law. A director has said Cape Girardeau's interpretation was incorrect and violated the law.

According to inquiries made by the Southeast Missourian, Cape Girardeau was the only state municipality that was not increasing the wages of its part-time workers to comply with the statute. Many municipalities had few or no workers below the $6.50 level.

While city leaders stand by their legal interpretation, they do not believe following it is worth the public backlash against their position.

"My message tonight is that we are following through with a mandate that the citizens who, right, wrong or indifferent, overwhelmingly supported" the minimum wage increase, Knudtson said.

Proposition B received 60 percent of votes in Cape Girardeau County.

But this increase might not be the end of the minimum wage story. The newly elected Congress has indicated a desire to increase the federal minimum wage to $7.25. City staff hopes that increase will not go into effect as swiftly as the state initiative which allowed less than two months for municipalities to alter budgets.

"We had actually been considering the federal wage issue prior to the state issue," Leslie said.

"Normally, in the past, those have been given implementation periods. Over a two-year period or something. So hopefully this will just be the start of implementing that."

Knudtson said there is little doubt a federal minimum wage increase would hit Cape Girardeau hard.

"Those ramifications could be very, very big, but again that's the system and the world we live in. So we'll have to figure out a way to address those at that time," Knudtson said.

tgreaney@semissourian.com

335-6611, extension 245