Minimum wage increase now in effect in Missouri

On Jan. 1, Missouri’s minimum wage rose by 75 cents per hour, from $7.85 to $8.60, and that has wide-ranging effects for local businesses.

Jackson Area Chamber of Commerce director Brian Gerau said he’s heard major concern from business owners, particularly in the restaurant industry.

“This was a major concern of the chamber, as with any increase in minimum wage, the increase would also have to be passed on to the consumer,” Gerau said, adding consumers will most likely see a slight increase in pricing.

John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, also said he had spoken with restaurant owners and those in the hospitality industry, whose concerns were “significant” and “wide-ranging.”

Some concerns were immediate, he said, although he said several employers already pay above minimum wage, to recruit and retain more effectively.

The minimum wage increase will continue each year: from $7.85 to $8.60 in 2019; $9.45 in 2020; $10.30 in 2021; $11.15 in 2022; and $12 in 2023.

In 2023, when the minimum wage increases to $12 per hour, Mehner said, that will likely mean some costs will rise.

“Certain places just say, ‘Look, I’m not going to be able to absorb that. I’m going to have to pass it along,’” Mehner said.

Inflation is another potential issue to come out of a minimum-wage increase, Mehner said.

And there’s the psychological angle as well, he said.

“Someone making $12 per hour now is substantially above the minimum wage,” Mehner said. “They’re going to wake up in 2021 and be making minimum wage.”

That a job paying $12 per hour will one day be the minimum, Mehner said, will lead workers to think of themselves, their positions, as minimum-wage level.

“Those are all questions they’ll have to think about,” Mehner said.

Gerau said he hopes the increase in wages will lead to increasing consumer spending, which would in turn help the economy, and should lead to an increase in demand for goods, and job creation.

Increased wages also assist with employee longevity at a job, Gerau said, instead of seeking better pay elsewhere.

“This hopefully reduces employers’ expense in marketing for employees and training,” Gerau said.

Higher wages means increased tax revenue for items such as streets, bridges, police and fire departments, he added.

But, Gerau said, the raise in minimum wage could lead to layoffs or reduced hours in an effort by employers to cut expenses.

And this could lead to more automation, he said: “That would directly lower job opportunity and paying jobs.”

Outsourcing could be another result, Gerau said, meaning United States workers could lose jobs to foreign counties with lower wages.

In the November election, Missouri voters approved Proposition B, which allowed the minimum wage increase.

mniederkorn@semissourian.com

(573) 388-3630