STATE FACES MINIMUM WAGE BATTLE

Proposals to make Missouri's minimum wage the highest in the nation would spell economic disaster, critics say.

"This is outrageous," said Dan Mehan, vice president of governmental affairs for the Missouri Chamber of Commerce.

While a wage-hike measure in the Missouri Senate may go nowhere this session, the issue could come before voters in the November election.

"It is going to get on the ballot," predicted state Sen. Peter Kinder, R-Cape Girardeau, a strong critic of the proposed wage hike.

"This is a real dagger aimed at small business," he said.

A citizens' group, the Association of Community Organizations for Reform Now (ACORN), has mounted a petition effort to raise the minimum wage. The group needs 120,000 signatures of registered voters to get the issue on the ballot.

The ACORN proposal is identical to the Senate legislation.

State Sen. William L. Clay Jr. of St. Louis introduced a bill that would raise the minimum wage to $6.25 an hour as of Jan. 1, 1997, a 47 percent increase.

Missouri's current minimum wage is the same as the federal minimum wage, $4.25 an hour.

The state's minimum wage would climb to $6.50 on Jan. 1, 1998, and to $6.75 on Jan. 1, 1999.

Beginning in 2000, the minimum wage would rise by 15 cents annually.

In 10 years, the minimum wage would be at $7.80.

Proponents of the wage hike argue that the increase is needed.

"What this campaign is really trying to do is reward hard work in this state," said Mary Lisa Penilla, an organizer with the Campaign to Reward Work. The campaign operates from ACORN's offices in St. Louis.

"There are 700,000 Missouri workers earning less than $6.25 an hour," Penilla said.

At the current minimum wage, a worker makes less than $9,000 a year. "It is not a living wage," she said. "The end result is that children in Missouri are living in poverty."

"The bill would give Missouri the highest minimum wage in the country, making it a disaster for business in the state and business looking to come to Missouri," Mehan said.

It would also mean added costs of more than $20 million to state government, which employs some minimum-wage workers, he said. Missouri would become the only state in the nation to mandate annual increases in the minimum wage, he added.

Critics point out that the first-year increase alone is higher than a proposal in the U.S. Senate to raise the federal minimum wage to $5.15 an hour.

There are an estimated 306,600 jobs in Missouri that pay between $4.25 and $5.15 an hour.

If the federal minimum wage is raised to $5.15 an hour, Missouri will lose an estimated 16,200 jobs, according to the Employment Policies Institute in Washington, D.C.

Currently, New Jersey has the highest minimum wage in the continental United States at $5.05 an hour.

Clay's wage-hike measure is in a Senate committee. With only five weeks left in the legislative session, the bill may not even make it out of committee.

Still, Mehan isn't ready to write its obituary. "It is not dead by any means," he said.

Mehan and Kinder said raising the state's minimum wage would destroy jobs.

"People who want to destroy many, many thousands of jobs for teen-agers and chop off the first rung of the economic ladder should be all for it," said Kinder.

"The first jobs I had as a teen-ager would not have been there if we had had a higher minimum wage," he said.

"This business of waving a government wand and magically setting the price of labor, which ought to be set by the marketplace, is crazy," Kinder said.

It would be difficult for Missouri businesses to compete with businesses in neighboring states, which would all have lower minimum wages, Mehan said.

He said that is a major concern because 70 percent of Missouri's jobs are in cities on the state's borders.

But Penilla disputed the dire predictions. She said people feared New Jersey would lose jobs to neighboring Pennsylvania when it raised its minimum wage to $5.05 an hour.

But that didn't happen, she said. New Jersey restaurants actually added an average of 2.5 jobs per site after the wage increase occurred, she said.

Kinder said labor unions are behind the effort to drive up the minimum wage.

"Big labor is pushing this in the legislature and big labor is funding the effort statewide," he said.

Penilla acknowledged that labor unions are among the groups supporting the wage hike.

Kinder said labor's efforts are part of the Clinton re-election strategy. He called the proposal a "cynical ploy" aimed at attracting the votes of blue-collar workers.

But Duke McVey, president of the Missouri AFL-CIO, said the minimum wage needs to be raised.

"Number one, it is morally right," he said.

"The problem with capitalism is that if it is not tempered with some social reserve, it is survival of the fittest," McVey said.

He contended that minimum-wage hikes haven't killed jobs in the long run.

McVey said he doesn't know how much money various unions might spend to campaign for passage of a minimum-wage hike should the issue get on the November ballot.

But he said re-electing President Clinton is a higher priority in terms of campaign funding.