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Fast-food workers demonstrate for higher wages

Fast-food workers demonstrate for higher wages outside a McDonald's restaurant at Natural Bridge Avenue and Kingshighway on Thursday, April 14, 2016. Photo by Cristina Fletes, cfletes@post-dispatch.com

Missouri could lose 218,000 jobs if it were to raise its minimum wage to $15 an hour, the Heritage Foundation says.

The conservative think tank, reacting to proposals in various states and in Congress, says as many as 9 million jobs could be lost nationwide with a $15 minimum wage.

In assessing the state-by-state impact, Heritage research fellow James Sherk says employers "might respond to a $15 mandate by eliminating positions, cutting hours, and looking for new ways to implement labor-saving technology."

Sherk admits that his numbers are "not a precise estimate," but says he relies on studies showing that a 10 percent wage increase reduces employment by 6.8 percent in the long run.

For Missouri, that translates into 218,000 jobs lost if the state raises its wage floor to $15. A federal minimum wage at the same level would cost Missouri just 190,000 jobs, because surrounding states would face the same labor costs.

For Illinois, where the current minimum wage is $8.25 an hour, Sherk calculates that an increase to $15 would destroy 324,000 jobs. If the increase is mandated at the federal level, Illinois' loss would be just 306,000 jobs.

California and New York are the first two states to pass laws raising the minimum wage to $15. Sherk says California risks losing 981,000 by 2021 and New York's losses could total 434,000.

The job losses are greater in low-wage areas than in high-wage ones, Sherk says. He says 40.9 percent of Missouri workers and 35 percent of Illinois workers would be directly affected by a state minimum wage of $15.

Missouri's current minimum wage is $7.65 an hour, and an inflation adjustment will probably raise it to $7.70 on Jan. 1. There's no current proposal to take it higher, although activists have held "Fight for $15" marches in St. Louis periodically. 

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