WAGE-HIKE PLAN BAD, GROUP TOLD

"Proposition A is not good news for Missouri business."

That was the message Dan Mehan delivered at the Cape Girardeau Chamber of Commerce's First Friday Coffee.

Mehan, vice president of governmental affairs for the Missouri Chamber of Commerce, said approval of Proposition A, a proposal to increase Missouri's minimum wage to more than $6 an hour in January and up to $7.80 over the next decade, could hurt the people the measure is meant to help.

"We're not against a minimum wage," said Mehan. "But it should be on a federal level where every state will have the same minimum."

The Proposition A proposal would make Missouri's minimum wage the highest in the nation. New Jersey has the highest minimum wage: $5.05.

"I agree with one state legislator, who said the proposal would `unemploy Missouri in a hurry,'" said Mehan.

The proposal on the Nov. 5 ballot in Missouri calls for minimum wages of no less than $6.25 in January, $6.50 in January 1998, $6.75 in January 1999, and starting Jan. 1, 2000, an additional 15 cents per year thereafter.

"That would place the minimum at $7.80 per hour in 10 years," said Mehan.

What will this mean for Missouri businesses?

"We'll lose more than 200,000 jobs the first three years," said Mehan. "That figure will grow to 250,000 in 10 years."

Studies have indicated that total state administrative costs will increase in excess of $100,000,000 annually by 2000, said Mehan. Local government costs are expected to rise in excess of $1,000,000 annually.

Businesses will leave the state, said Mehan.

"Seventy percent of our businesses are located along state borders," said Mehan. "Many of these businesses have indicated to us that they will have to move across state lines to take advantage of lower minimum wages."

Under Proposition A, the Missouri starting wage would be $1.50 an hour -- $60 for a 40-hour week -- more than minimum wages in Arkansas, Illinois, Kansas, Kentucky, Oklahoma and Tennessee.

"This proposition will have a heavy effect on small business," said Mehan. "It's this simple: When the price of something -- labor, in this case -- goes up, people will use less of it."

A work study reveals that many jobs in Missouri will disappear, said Mehan. "Many current, minimum-wage jobs for students will be gone."

Another concern is that the increase would result in some skilled teen-agers leaving school.

A major concern now is that many people may associate the Missouri minimum wage bill with the federal minimum wage bill that went into effect this month.

The new federal minimum is $4.75, and will increase to $5.15 in September.

"We need to conduct a grass-roots effort to give people all the facts," said Mehan. The state and local chamber will be conducting in-house informational sessions for employees.

"People need to know the disastrous effects this bill could have on business," said Mehan. "It will literally cripple the economy in the state of Missouri."

Identical legislation was proposed earlier this year, said Mehan. But it was heavily defeated. That was when the Association of Community Organization for Reform Now became involved. The group collected signatures to place it on the ballot.

Since then a new group, SOS JOBS Coalition, has been founded to tell why Missourians should reject the proposition.

Members of SOS include representatives of more than 200 businesses, associations and local chambers of commerce, said Mehan.

John Mehner, president of the Cape Girardeau Chamber of Commerce, said the local chamber would provide information and help conduct meetings for businesses and employees.

"Anyone interested in an in-house meeting should call our office (335-3312)," said Mehner.

Few workers make minimum wage in Cape Girardeau County, where the unemployment rate hovers between 3.5 and 4 percent.

One restaurant owner said he was paying his kitchen help $6 an hour. Help-wanted signs, especially at fast-food facilities, advertise for help with wages ranging from $5 to $6.