The Joplin Globe, Joplin, MO

December 8, 2012

Missouri minimum wage will increase on Jan. 1

State to become one of 19 with higher minimum wage than the federal wage

By Roger McKinney
Globe Staff Writer

JOPLIN, Mo. — Most workers making minimum wage or less in Missouri will get a small raise on Jan. 1. That’s when the minimum wage will increase from $7.25 to $7.35 per hour.

When that happens, Missouri will become the 19th state with a minimum wage higher than the federal minimum, which remains at $7.25 per hour.

The state minimum wage is tied to the Consumer Price Index as a result of a ballot issue that voters approved in 2006 by a margin of 76 percent to 24 percent.

The move is not without its critics.

“That will put us at a competitive disadvantage,” said Karen Buschmann, vice president of communications for the Missouri Chamber of Commerce and Industry. “It’s particularly damaging to entry-level workers. Employers will hire fewer workers.”

But Tammy Cook, of Carthage, said she will challenge anyone to try to get by on the minimum wage. She had a minimum-wage job as a caregiver at a group home until becoming disabled after battling cancer.

“By the time you pay rent, electric, the car payment and groceries, there’s nothing left,” she said. “God forbid you get sick and have to go to the doctor. I literally hoped and prayed that nothing happened because there was literally nothing left.”

Workers earning minimum wage at 40-hour-per-week jobs now make $15,080 annually. The minimum wage increase would provide the workers with an additional $208 annually, for a total of $15,288.

Cook said though the dime-an-hour increase in the minimum wage is a positive step, it wouldn’t make much difference because costs are rising more rapidly than the minimum wage, and minimum wage workers will continue to struggle, as she did.

She said she put off going to the doctor because she couldn’t afford to take time off work.

She also said getting enough food for herself and her daughter was often difficult. They sometimes relied on friends for food.

“There were times I would have to put my pride aside and call friends,” Cook said.

Rising prices

Two area business owners said they aren’t really troubled about the minimum wage increase, though one said he will pass along the cost increase to his customers.

Ismail Balazi, owner and manager of Norma’s Kitchen in Webb City, said his servers make minimum wage.

“It’s just a dime,” Balazi said. “I’ll be more than glad to pay it.”

He said he is sympathetic to his workers and his customers, so he will continue to keep his prices affordable.

“Everything is going up,” Balazi said. “We see people in the restaurant every day who are short on money.”

David Ruth, a Neosho city councilman who owns the Sonic restaurant there, said he will increase the cost of burgers or some other menu items.

“It doesn’t affect our business,” Ruth said. “Whenever the minimum wage goes up, our prices go up.”

He said there’s a limit. His business can’t afford to raise prices beyond what customers will pay.

He also said Sonic is the first job for most of his workers and most are teenagers. Minimum wage increases have kept his workers at minimum wage longer. Whereas he once gave raises every six months, now it is a year or more before a new worker gets a raise. Workers with more seniority also receive less frequent raises.

“I’m not able to give as many merit raises because of raising the bottom level,” Ruth said.

The federal Bureau of Labor Statistics notes that workers younger than 25 represent about half of those paid minimum wage or less. There were nearly 4 million workers older than 16 nationwide making minimum wage or less in 2011.

Chamber opposition

Buschmann said the Missouri Chamber of Commerce and Industry will continue to push for legislation to reverse automatic cost-of-living increases in the state’s minimum wage law.

She also said labor is the biggest cost for business owners, and the higher wage puts Missouri businesses at a disadvantage compared with neighboring states. She said only Illinois among Missouri’s neighbors has a higher minimum wage.

Other states have higher minimum wages, however. In Washington state the minimum wage is $9.04 an hour and will increase to $9.19 an hour on Jan. 1. The minimum wage in Oregon also will increase on Jan. 1, from $8.80 to $8.95 an hour.

Buschmann said many things have changed since voters approved the ballot measure in 2006, including increases in the federal minimum wage and increased unemployment rates. The federal minimum wage went to $7.25 an hour three years ago but has not been raised since.

“What we are looking at is trying to keep more people employed and keeping wages competitive,” Buschmann said. “We want to allow employers to give raises on their own merit and not some government mandate.”

Missouri Chamber President Daniel Mehan said in a statement that the increase would cause uncertainty in a difficult economic climate and because of the annual cost-of-living increases it positions Missouri to eventually raise its minimum wage to uncompetitive levels.

‘Good for business’

Although Missouri voters overwhelmingly approved the minimum wage law three years ago, Progress Missouri was unsuccessful in a petition effort to place a $1 minimum wage increase on the November ballot in the state. The group describes itself on its website as “a marketing department for progressive ideas.”

Executive Director Sean Nicholson also noted that an attempt to undo the measure in the Missouri Legislature last session failed.

Nicholson said the public “overwhelmingly supports” the current law.

“Small businesses know that more money in the pockets of its workers means more money in the pockets of the middle class and upper class,” he said. “Voters want it. It’s good for business.”

Missouri law

Under Missouri law, retail and service businesses with gross annual sales of less than $500,000 don’t have to pay the increased minimum wage, which goes from $7.25 to $7.35 on Jan. 1.

Minimum wages

States with minimum wages higher than the federal level of $7.25 an hour, as of Jan. 1, 2012:

Alaska     $7.75

Arizona     $7.65

California     $8.00

Colorado     $7.64

Connecticut     $8.25

Florida     $7.67

Illinois     $8.25

Maine     $7.50

Massachusetts     $8.00

Michigan     $7.40

Montana     $7.65

Nevada     $8.25

New Mexico     $7.50

Ohio     $7.70

Oregon     $8.80

Rhode Island     $7.40

Vermont     $8.46

Washington     $9.04

Source: National Conference of State Legislatures