St. Louis, Kansas City Take Stock Of Minimum Wage Hikes Being Undone By GOP Lawmakers

Jul 13, 2017

When it became clear the Republican-controlled state legislature wouldn’t be raising the minimum wage above $7.70 an hour, leaders in St. Louis and Kansas City took matters into their own hands.

But their wage increases will be a thing of the past come Aug. 28, as Gov. Eric Greitens will let go into effect — but not sign — a bill requires all cities to stay at the statewide minimum. It prevents Kansas City from implementing its $8.50 an hour wage in September, and will knock out St. Louis’ recent shift to $10 an hour.

St. Louis Public Radio and KCUR talked to workers and businesses affected by the cities’ laws, which were upheld by the state Supreme Court in late February.

Backers of a higher minimum wage contend it provides vital income to people who are struggling to make ends meet. But some business owners and financial experts felt the laws affected their bottom line, and pointed to recent studies questioning whether higher minimum wages actually help workers.

While some want to see a lawsuit to save St. Louis and Kansas City’s ordinances, the best hope may be pursuing a statewide ballot initiative boosting the minimum wage everywhere. Missouri Jobs with Justice already is gathering signatures to get it on the November ballot.

'The government doesn't appreciate us at all'
Alexis Straughter works at a nursing home. Her salary went from $9.70 an hour to $10 an hour this year. It was set to go up to $11 an hour in 2018.
Credit Jason Rosenbaum / St. Louis Public Radio

Almost 30 states and Washington, D.C., have minimum wages that are higher than the federal $7.25 an hour, according to the National Conference of State Legislatures. MIT’s calculator for a living wage shows that a sole provider for a one-adult, two-child family in St. Louis needs to earn $26.44 an hour at a full-time job. In Kansas City, that figure is $26.77 an hour. 

When St. Louis aldermen approved a higher minimum wage in 2015, it was aimed at people like Alexis Straughter, who works a St. Louis nursing home.

After the court decision, the city upped wages to $10 an hour in May. Straughter went from $9.70 to $10, and would have gotten $11 an hour next year had the legislature not stepped in.

“It made a big difference,” Straughter said of the raise. “I’ve seen a big change in my normal paychecks with trying to pay rent and buy food and things like that. I had a little money to play with regarding my two children, like paying tuition (for preschool). Because tuition is not cheap when you have two little girls.”

Straughter is not happy that St. Louis’ law is going away, saying it feels like lawmakers “just ripped us off.”

“The government doesn’t appreciate us at all. We take care of elderly people,” Straughter said. “We probably take care of some of their aunts and uncles and things like that. But it’s like, it’s not seen at all. It’s like we’re the stepping stools. Like, working families are not capable of having a decent wage to live on.”

Straughter’s employer, Royal Oak Nursing and Rehab, did not return email and telephone messages from St. Louis Public Radio.

Kansas City’s minimum wage was to go from the state baseline to $8.50 in September, and jumping to $13 an hour by 2022. Plus, residents will still get to vote on a separate ordinance in August that would raise the wage to $15 an hour by 2021, even though it can't go into effect.

Terrance Wise supported the efforts to raise Kansas City’s minimum wage in 2015 and this year — only to see the General Assembly strike down those laws both times.

Wise, whose wages from his job at McDonald’s supports three daughters, said he’s frustrated.

“We had to march, strike and rally to make that happen. Our voices were being heard. We were ecstatic,” Wise said. “And just to see it ripped away … to see all that hard work wiped out with the swipe of a pen, it’s devastating. Really nothing to compare it to.”

Unintended consequences
Urban Eats co-owner John Chen said his eatery wasn't affected by St. Louis' minimum wage ordinance. But he said it still had an affect on his restaurant — as well as other small businesses close to him.
Credit Jason Rosenbaum / St. Louis Public Radio

Mitch Waks has a different perspective on St. Louis’ minimum wage law. He operates Cooperative Home Care, which provides in-home health care to the region’s low-income older and disabled people.

Waks’ company is receiving less money from the state after Greitens vetoed a proposal that would have provided more money for in-home care services. And, as Waks explained, his company can’t ask the state for more money to pay for the increased labor costs that resulted from a higher minimum wage.

Waks said he’s paid thousands more a month to his employees since St. Louis raised its wage, and was seriously thinking of relocating his business.

“It isn’t the same as a fast food company who says ‘OK, now the price of French fries just went up 12 cents to cover my new labor increase and everybody will have to deal with that.’ I can’t do that,” Waks said. “My business may be cut in half if I lose those people.

“But forget me. What about the people who can’t get served? Who puts their meds together in a pill box tomorrow morning? Who makes sure they get out of bed and get a bath and gets dressed?”

In south St. Louis, Urban Eats co-owner John Chen said he pays his employees at least $9 an hour. He has an exemption to the city’s new law because the eatery doesn’t make enough money or have enough employees.

But Chen said there were still negative consequences: It was harder to retain employees when fast food companies were offering a higher wage and he was wary of adding too many employees because it may have jeopardized his exemption.

“We really should try to solve the large issues such as poverty and income inequality,” Chen said. “We really should not do that on the backs of our neighborhood and small businesses.”

National discussion
Gov. Eric Greitens has questioned whether higher minimum wages are helpful to workers. He cites a recent study showing negative consequences of a Seattle minimum wage hike.
Credit Carolina Hidalgo / St. Louis Public Radio

Higher minimum wages don’t necessarily lead to more jobs, Greitens argued during a news conference last week in St. Louis. He pointed to a study from the University of Washington that found that employers in Seattle cut workers’ hours after the minimum wage there went up to $13 an hour in January 2016.

“My message to the state of Missouri and the people in the city of St. Louis is that we need to pursue policies that are actually going to raise the take home pay,” Greitens said. “And, of course, employers ... could make any decision that they’d like about the way they’re compensating their employees.

“We want to pursue policies that actually raise the take home pay of the people of Missouri,” he added.

Charles Gascon, an economist at the Federal Reserve Bank of St. Louis, said raising the minimum wage helps low-income households. But he added it can also help people who are in better financial shape, like teenagers.

“I use the analogy of like a fishing net, right. Right? You’ll pull up a lot of people, a considerable number of people,” Gascon said. “But at the same time, you’ll pull up a number of people who were not in your intended group.”

Gascon said economies are complex, so it’s hard to isolate and evaluate the effects of raising a local minimum wage.

“The research on it has not come down strongly, one way or another as to what the impact is going to be,” Gascon said. “Typically, the impacts are on the margins.”

But Terrence Wise, who had a brush with homelessness a couple of years ago, said for him and for his family, raising the minimum wage is a game-changer. He’s not letting it go, and he’s not alone.

St. Louis Public Radio political reporter Jo Mannies contributed to this report.

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