Missouri recently passed legislation that will go into effect on August 28, 2017, overriding city laws and capping the minimum wage in Missouri at $7.70 per hour. The statute sought to override the Missouri Supreme Court’s approval of the City of St. Louis’ 2015 wage hike – an increase which was recently followed by the City of Kansas City.
While Missouri has proactively sought to restrict the rapid increase in the minimum wage sought to be implemented by some of its cities, other states like California and New York have taken the opposite approach and adopted statutory increases to raise their respective minimum wages to the $15 level adopted by certain cities throughout the country. Whether at the city or state level, proponents of the increases typically assert that they are needed to provide employees with a “livable wage.” However, recent studies indicate that the wage increase may actually cost employees money.
The National Bureau of Economic Research (“NBER”) recently presented a working paper https://evans.uw.edu/sites/default/files/NBER%20Working%20Paper.pdf
analyzing the effect of minimum wage increases on low-wage employment following the increases that have gone into effect in Seattle, Washington. NBER determined that the most recent increase in Seattle, taking the minimum wage to $13 per hour, has caused employers to reduce hours by around 9 percent, thereby causing employees to actually lose money on average by $125 per month despite their increased wage rates. As more analysis is conducted, the true impact of these wage increases will be revealed identifying whether the actions of states like Missouri or those like California and New York are actually in the best interest of their citizens.