Missouri passes law to prevent municipal minimum wage hikes, citing devastating economic effects

Missouri passes law to prevent municipal minimum wage hikes, citing devastating economic effects
Missouri's governor will allow a bill to pass that will block cities from setting a minimum wage higher than $7.70 an hour after seeing that raised minimum wages hurt Seattle and other cities. (Getty Images)

Missouri’s Republican Gov. Eric Greitens is set to allow House Bill 1194 to pass that will prevent any city in Missouri — including St. Louis — from having a municipal minimum wage that is higher than $7.70 an hour.

In announcing his decision, Greitens cited a study that shows the increased minimum wages in Seattle have hurt the city’s businesses and workers.

Greitens has refused to sign the bill, however, sending the bill to Missouri’s Secretary of State Jay Ashcroft for authentication after 15 days have passed from the Legislature’s approval of the bill. Under Missouri’s Constitution, this means that the bill will take effect without Greitens’ signature.

St. Louis’ municipal minimum wage is currently $10 an hour, and was set to increase from $10 to $11 in January 2018.  Greitens said St. Louis’ plan would only hurt businesses, and that bigger paychecks will not come at the hands of government intervention.

“I ran for governor to bring more jobs to Missouri,” Greitens wrote in a statement. “Our state needs more private sector paychecks and bigger private sector paychecks. Politicians in St. Louis passed a bill that fails on both counts: It will kill jobs, and despite what you hear from liberals, it will take money out of people’s pockets.

“The St. Louis politicians who did this claim it will help people. It’ll hurt them. This increase in the minimum wage might read pretty on paper, but it doesn’t work in practice,” Greitens said. “Government imposes an arbitrary wage, and small businesses either have to cut people’s hours or let them go. They tried this in Seattle. The minimum wage went up, and the results are heartbreaking: The average worker in the city lost $125 a month. That’s $1,500 a year because jobs were lost and hours were cut. Liberals say these laws help people. They don’t. They hurt them.”

The study Greitens cited was conducted in late June by the University of Washington. The study suggested that Seattle’s decision to raise the minimum wage from $11 to $13 had a negative effect on the city’s businesses and workers. According to the study, the new minimum wage reduced worker’s hours by 9 percent as employers attempted to compensate the higher pay with lower hours.

The study also claimed that had the minimum wage never been raised, 5,000 more minimum wage jobs would have been saved. In total, the study estimated that minimum wage workers lost up to 3.5 million hours of work due to the Seattle law.

Greitens said that though he is allowing the bill to pass, he will not sign it, blaming the state’s lawmakers for not coming up with a comprehensive bill that he could support.

“Politicians in the legislature could’ve come up with a timely solution to this problem. Instead, they dragged their feet for months. Now, because of their failures, we have different wages across the state,” Greitens said in a statement about the bill. “It’s created uncertainty for small businesses. And it all could have been avoided if the politicians had done their job on time.

“I disapprove of the way politicians handled this. That’s why I won’t be signing my name to their bill,” he added.

Without the governor’s signature, the bill will automatically take effect Aug. 28. The minimum wage in St. Louis will revert to $7.70 an hour on Aug. 28.

Democrats claimed that Greitens unwillingness to sign the bill was cowardly, however.

“Signing it would have shown the fact that he is heartless and that he really doesn’t care about the working poor,” Democratic state Sen. Jamilah Nasheed told the St. Louis Post-Dispatch. “So what he didn’t want to do is sign a bill to take money out of the pockets of those who already have an increase, but still do so.”

Small business owners in St. Louis are feeling glad about the change, however. According to CBS News, Amer Hawatmeh’s downtown St. Louis restaurant has been suffering since the minimum wage increased.

CBS reports that Hawatmeh believes that government should not set the wage, “but a combination of worker determination and customer demand that should set the correct wage.”

“That’s how I built myself,” he said. “That’s how I’m teaching my children to build themselves. Don’t ask what do I get, ask what can I do.”

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