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With state law set to preempt St. Louis minimum wage, groups push for Missouri-wide hike

With state law set to preempt St. Louis minimum wage, groups push for Missouri-wide hike


It’s been almost four months since Wanda Rogers got a raise.

Even so, Rogers, 46, a mother of four, is still struggling to pay her rent and worries she might be evicted from her home in the Wells-Goodfellow neighborhood. On top of that, she fears her raise — to $10 an hour from the state minimum of $7.70 — is going away.

“If it goes back down, then I’m really gonna be in the hole,” said Rogers, who was part of a small protest earlier this month outside the McDonald’s restaurant at 1400 Hampton Avenue, where she works. “It put an extra $200 on my check.”

She and her fellow protesters have been pushing employers to keep the higher $10 minimum, but many of the estimated 30,000-plus workers in the city who saw bigger checks for several months could soon see their pay cut.

That’s because on Monday, employers in the city of St. Louis will no longer be bound by the local ordinance that mandated a minimum wage of $10 an hour in the city. A state law passed on the final day of the 2017 legislative session takes effect Monday, overriding the St. Louis ordinance and lowering the floor to $7.70 an hour.

While local minimum wage ordinances have become a popular issue among Democratic politicians in many of the country’s big cities, St. Louis’ situation is somewhat unique.

It’s not that a Republican-leaning state legislature blocked a local law — that has happened in places such as Cleveland and Birmingham, Ala. What’s different in St. Louis is that the local ordinance will have been in effect for months before a state pre-emption law kicks in.

Now workers are in limbo and employers face the uncomfortable choice of keeping a higher payroll or cutting employee wages back to a lower minimum. Some do plan to reduce wages, but many are planning to keep the raise for the time being, said Brad Kafka, an attorney who heads Polsinelli’s labor and employment practice.

“It’s difficult for an employer to tell employees that now we’re going to cut your wages by $2.30 an hour,” he said. “I think a lot of employers are struggling with it.”

It’s unclear how many businesses will actually reduce wages. Workers such as Rogers say their managers aren’t saying much about whether they will maintain the raises. A spokesman for area McDonald’s franchisees, often the target of protests organized by the Fight for $15 group that has long pushed for higher wages, did not return requests for comment.

But at least some business owners say they won’t cut employee wages when the state law takes effect.

“People would be angry and then they wouldn’t do a good job and they’d be resentful,” said Harman Moseley, whose STL Cinemas operates four local theaters, including the Chase Park Plaza, Moolah Theatre and MX Movies.

In order to keep all his employees equal, Moseley said, he already decided to pay $10 an hour to workers at his theater in the Galleria, which is in Richmond Heights and not subject to the city ordinance.

The higher minimum pushed up wages for about 70 of his 80-or-so workers, he estimated. Managers who were making more than the $10 minimum then wanted their own raises. Annual payroll, he said, will be at least $100,000 more, plus the additional payroll taxes it triggers.

It’s not an easy time to be in the theater business, but Moseley is hoping keeping the higher pay translates into happier workers and thus more satisfied customers. He said STL Cinemas would just have to be more vigilant about staffing at the right level and sending people home when movies don’t draw the expected crowds.

“This is not going to put us out of business,” Moseley said. “We might not be quite as profitable as we would have been, but we feel like we’re doing the right thing.”

State steps in

Monday’s state law comes two years to the day that then-Mayor Francis Slay signed the St. Louis ordinance. Court challenges from business interests delayed the ordinance’s effective date until the Missouri Supreme Court ruled in February that the law could take effect, which it did in May.

Legislators in Jefferson City moved to block the St. Louis ordinance, but Democratic delay tactics and Republican lawmakers’ bickering with Gov. Eric Greitens, also a Republican, ultimately pushed action to the final hours of the legislative session. Greitens opted to let the bill take effect without his signature.

Now, efforts have turned to a local “Save the Raise” campaign urging St. Louis businesses to maintain the $10 minimum once the new state law takes effect. Dozens of mostly small, local restaurants and shops have signed on.

Other governments are looking at higher minimum wages, too. In a symbolic gesture in Kansas City, 69 percent of voters voted Aug. 8 for a higher minimum wage despite knowing the state law had already blocked local minimum wage increases. In Illinois, lawmakers passed in June a bill that would increase the state’s minimum wage of $8.25 to $15 an hour by 2022. Illinois Gov. Bruce Rauner on Friday vetoed the bill; at least one sponsor said he will seek an override of the veto.

In Missouri, advocates of a higher minimum wage are already mobilizing a new statewide campaign to get a minimum wage measure on the November 2018 ballot. If organizers with the “Raise Up Missouri” campaign gather enough signatures and voters approve it next year, Missouri’s minimum wage would go up to $8.60 in 2019 and increase 85 cents each year until 2023, when it would hit $12 an hour.

Jake Rosenfeld, a sociology professor at Washington University who studies labor and inequality, points to the successful 2014 statewide measure raising Arkansas’ minimum wage as an example of the issue’s resonance beyond a liberal base.

“What we know from polling is that minimum wage increases are incredibly popular and that they cut across, more than other issues, the ideological spectrum,” Rosenfeld said. “And if it’s on the ballot, it stands a very strong chance of passing.”

St. Louis is already a heavily Democratic city, so there probably won’t be backlash at the ballot box for Missouri Republicans who worked to overturn the minimum, said David Kimball, a political science professor at the University of Missouri-St. Louis. But if advocates can get the word out about the pre-emption effort, it could mobilize some people.

“In general, raising the minimum wage polls pretty well,” Kimball said. “It may in the end increase support for raising the minimum wage statewide.”

Lara Granich, who is leading the statewide Raise Up Missouri petition drive, said the fight over St. Louis’s ordinance makes it the right time for a statewide push.

“Certainly pre-emption put a lot of energy behind the statewide (petition) effort because people are actually losing money to put food on the table,” Granich said.

Mixed research

A statewide approach could also be more palatable to some opponents that worried the city was shooting itself in the foot by setting a far higher minimum wage than much larger St. Louis County or even Illinois, which already has a statewide minimum 55 cents higher than Missouri’s.

“Having something that is broader or statewide is something that we would be more interested in,” said Hart Nelson, the St. Louis Regional Chamber’s vice president of public policy.

That said, the Chamber still doesn’t want to see minimum wages in the region pushed too high.

“What works in Seattle isn’t necessarily the same thing as St. Louis because of our cost of living,” Nelson said.

In addition, many minimum wage increase beneficiaries don’t necessarily come from low-income families. An analysis from the St. Louis Federal Reserve Bank found that of an estimated 42,862 city workers making less than $10 per hour, only 17,871 came from households earning below $35,000.

If the goal is to improve life for poor workers, the Chamber supports a state earned income tax credit as a more precise tool.

Steve Fazzari, a Washington University economics professor, said research is mixed on minimum wage effects. Some papers show big job losses, others show minimal job losses.

A recent study out of the University of Washington on Seattle’s increases toward a $15 minimum wage that found job losses led to a 6 percent net decrease in pay to lower income workers was “interesting,” Fazzari said. But people are already criticizing some of its data.

So far, he said, the preponderance of research appears to show minimum wage job losses don’t outweigh the benefits of higher wages to remaining workers. That said, St. Louis is uniquely fragmented as a metropolitan area.

“There’s a kind of conceptual issue, which is the smaller region the increase applies, in my view, the more likely you are to get job losses,” he said. “That does not mean there would be overwhelming job losses for St. Louis. We don’t know that. It just is a reason to be a little more concerned.”

Fazzari personally thinks a New Deal-style government employment program could be more effective at reducing poverty, but that’s an idea only being discussed within academic circles at the moment.

“If we’re talking about things that can make a difference for low-wage workers over the next five years, probably the minimum wage is our best bet.”

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