ST. LOUIS • This city is a judge’s gavel away from instituting one of the highest minimum wages in the Midwest — a change that will undoubtedly mean bigger paychecks for some St. Louisans but which critics contend will cost others their jobs.
A circuit court is expected, possibly within days, to lift an injunction that will formally end a legal battle and allow the city to raise its minimum wage to $10 an hour. That’s well above the minimum of $7.70 in the rest of Missouri and $8.25 in neighboring downstate Illinois.
Technically, the city’s new rate will become effective the moment the injunction is lifted, a procedural requirement that isn’t in doubt. In practice, city officials say, they will expect employers to adjust employees’ pay as needed beginning the following day.
“It’s not like they have to change their wages for the last few hours of a day,” said Koran Addo, spokesman for Mayor Lyda Krewson.
Addo said the city would follow up by mailing out notices to almost 10,000 employers once the injunction is lifted. It will also mail out notices to post in workplaces specifying the new minimum wage, as required by the Missouri Department of Labor.
“We expect voluntary compliance from employers,” Addo said. “There is a complaint process that employees can go through if they aren’t being paid the minimum wage.”
The city passed the minimum wage increase in 2015, but it was prevented from going into effect by the circuit court injunction, after business groups sued. They argued that St. Louis shouldn’t be allowed to set a higher rate than the state rate because it would cause regulatory confusion. The St. Louis Circuit Court agreed, but on appeal the Missouri Supreme Court rejected the argument, ruling for the city on Feb. 28.
Last week, the high court refused to reconsider that order. That means all that’s required now for the law to go into effect is for the lower court to lift its injunction, which it must do in light of the state Supreme Court ruling.
Under the original city ordinance now going in effect almost two years after its passage, the $10 hourly minimum will be followed by a raise to $11 an hour on Jan. 1, 2018, then will rise with the inflation rate in subsequent years.
The new minimum won’t apply to businesses that gross under $500,000 per year or employ fewer than 15 workers. It doesn't apply to employees who work less than 20 hours per calendar year.
The change will put St. Louis’ minimum wage well above that of not just Missouri and Illinois, but of most states, and on par with many larger cities that have set their own rates. Chicago’s current rate, for example, is $10.50 an hour and is set to rise to $11 on July 1.
Supporters of St. Louis’ increase say it will alleviate suffering in a city with a poverty rate approaching 30 percent, almost twice the national average.
The increase in St. Louis will give an immediate raise to an estimated 35,000 workers who will make, on average, $2,400 more each year, said Paul Sonn, general counsel for the National Employment Law Project, a nonprofit that advocates for a higher minimum wage. “That is enough to make a real difference for a waitress or a nursing home worker who is trying to get by on less than $18,000 a year.”
“This is a tremendous, life-changing raise,” said Alexis Straughter, 27, a certified nursing assistant and mother of two who has had to tell her 8-year-old daughter she couldn’t join the school track team because she couldn’t afford the uniform. “The raise will mean that I won’t have to stress as hard about making ends meet. It means my kids can do extracurricular activities.”
But opponents of the change point out it will create a significant gap between what employers will have to pay in the city compared with the lower-wage surrounding county, which could cost jobs as businesses choose cheaper pastures.
“The base labor rate is going to be something like 30 percent higher in the city as compared to the county,” said Graham Renz of the Show-Me Institute, a think tank founded by wealthy St. Louis conservative activist Rex Sinquefield. “The city already has an economic deterrent with the earnings tax, so this high of a minimum wage difference is really just another big incentive for businesses to move.”
Some small businesspeople agree.
“It’s going to have an unintended consequence on neighborhoods like ours,” predicted John Chen, owner of the Dutchtown neighborhood restaurant Urban Eats, where he starts employees at $9 an hour. He worries the increase could drive small businesses out of areas that desperately need them. “If there’s no economic opportunity, there’s no opportunity for the young people here.”
Employers, employees or others with questions about the city minimum wage can email them to email@example.com. Questions also can be directed to the Citizens’ Service Bureau, by calling 314-589-6735, or tweeting @stlcsb.
The Associated Press contributed to this report.
Editor's note: This post has been corrected. The new St. Louis wage applies to employees who work more than 20 hours per calendar year, not per week.