Missouri legislators do the traditional paper toss to end the last day of the legislative session on Friday, May 12, 2017, in Jefferson City, Missouri. (Christian Gooden/cgooden@post-dispatch.com)

Townsend: When a state rules over a city

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States’ rolling back minimum-wage hikes hurts low-wage workers.

By Laura Townsend

laura-townsend@uiowa.edu

The cost of living in St. Louis is higher than the cost of living in small-town Missouri. So why should both places have the same minimum wage?

In the Missouri Legislature, the lawmakers did not seem to consider that factor. After the legislators passed a new law that forbids city and county governments from setting their own minimum wages, St. Louis-area workers now face a hard blow to their paychecks. As the fight for minimum-wage hikes increases nationwide, Missouri is forcing St. Louis to lower its minimum wage from $10 to $7.70 starting Aug. 28. This brings into question whether a state government should have power over a city government to pass such drastic laws.

The decision comes soon after economists at the University of Washington found that raising minimum wage would hurt low-wage employees more than benefit them.

According to the University of Washington’s report, an increase in minimum wage means fewer hirings, fewer hours, and more responsibility placed on current staff. The university conducted this research in Seattle as the city gradually increases its minimum wage to $15 an hour.

Still, minimum-wage increases continue to go into effect nationwide. Missouri’s government mandating lowering a city’s minimum wage is one of the first of its kind.

The minimum wage in St. Louis was set to rise to $11 by January 2018. Missouri Gov. Eric Greitens insists, however, that that plan “will take money out of people’s pockets” and “kill jobs.” The governor has not signed on the law that will lower the minimum wage, but according to Missouri law, as long as the governor does not veto a law, it goes into effect without a signature.

This means a potential cut of 23 percent for a minimum-wage earner’s paycheck. This is a major hit for those who struggle to make ends meet. To put it simply as a St. Louis native, $7.70 is not enough to live on in the city.

As much of the nation experiences increases in minimum wage, the issues that the University of Washington discovered do not seem to outweigh the benefits for workers. The study, which is not yet peer-reviewed, failed to account for large businesses. The omission likely affected the results of the study, which contradicted years of research that found minimum-wage increases are overwhelmingly beneficial to workers and economies.

Because the cost of living in St. Louis does not compare with the rest of Missouri, it does not make sense for the city to follow the state’s standard minimum wage. $7.70 gets a person much further in, say, Joplin than in a bustling metropolis such as St. Louis. Low-wage earners in St. Louis are already suffering financially, the reason for the planned hike in the minimum wage. A $2.30 cut means the suffering will be exacerbated.

While not every business owner will choose to decrease pay, those who do risk causing severe financial injury to the employees. A city government should have power over a state government to choose its own wage. Otherwise, the consequences are devastating.

For individuals in St. Louis facing a pay cut, a major adjustment in lifestyle is necessary. It is bad news for workers, especially those who are already earning the bare minimum, to see a loss this huge in their paychecks.

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