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Companies in St. Louis are no longer required to pay their minimum-wage employees $10 an hour. Here’s why they should do it anyway.
If you live or work in St. Louis, you’ve probably seen the bright, colorblocked signs in storefront windows stating “We Pay the Fair Wage.” These businesses have promised to maintain St. Louis’ short-lived minimum wage increase to $10 an hour, even after the Missouri legislature lowered the wage floor back to the state minimum of $7.70. These signs aren’t just a pledge to pay a living wage — they’re a statement about a company’s commitment to the city and its residents.
As a St. Louis native and local business owner, I’m deeply invested in the success of my city. Our legislature’s choice to revert to an unlivable minimum wage goes against our values and directly contradicts our self-determination. Though the city has encountered an obstacle, the road to better compensation for our most vulnerable workers is far from over.
By the time St. Louis passed its minimum wage ordinance in 2015, a hike was already long overdue. The first minimum wage of 25 cents was introduced in 1938 — that’s the equivalent of $20 today — but it hasn’t kept up since then. In fact, wage growth has slowed to a crawl, dropping below the rate of inflation. Between 2008 and 2015, prices rose roughly 10% while the Missouri minimum wage only increased by 40 cents, or 5%. As the value of the wage decreases, it becomes harder and harder for workers to support their families, stay out of poverty, and survive without government assistance.
The new regulations would have raised the minimum wage to $10 in 2015 and to $11 by 2020, bringing St. Louis in line with tech hub cities across the country. A protracted legal battle followed the Board of Aldermen’s decision, and the city won the right to implement the ordinance in 2017. But in May, the Missouri State Legislature overrode the city’s authority and passed a law requiring a standardized minimum wage across the state. When the law came into effect in August, nearly 31,000 workers saw their raises disappear as the city reverted back to $7.70 an hour. The decision also affects another 7,000 people who would have seen their wages rise to $11 in 2018.
As a real estate agent, I’m privy to one of the most financially important moments in a person’s life. My team and I know how hard our clients have worked to purchase a home, and how difficult holding onto that home can be. For many working-class families, one unexpected financial event could be enough to plunge them into bankruptcy or even homelessness.
Most importantly, we know that renting a home — let alone owning one — in St. Louis is nearly impossible on $7.70 an hour. A full-time minimum wage worker who doesn’t take vacation makes just under $16,000 a year before taxes. The Economic Policy Institute reports that roughly half of the workers affected by this cut either live in poverty or in households that make less than 200% of the poverty line. These workers can’t afford to support themselves or their families — much less participate in the city’s economy — without additional help. Many of our clients work 70-80 hours a week and still find themselves struggling. That’s not sustainable.
Innovation for Everyone
Opponents of the wage increase argued that it would force employers to cut jobs and discourage businesses from setting up shop in St. Louis, but the science suggests otherwise. Studies have found that minimum wage increases over the last seven decades have, in fact, decreased national unemployment. We also know that better pay makes workers more productive and decreases turnover, cutting hiring and training costs. A higher minimum wage is good for businesses and employees alike, begging the question of why the Missouri legislature denied the increase in the first place.
Local businesses recognize the potential benefits of a higher wage floor, which is why more than a hundred of them have pledged to “Save the Raise.” When they made that commitment, they supported two core beliefs: that people should be paid a living wage for the work they do, and that St. Louis has a right to self-determination. If the Missouri legislature and corporate conglomerates refuse to take up this work, than it is our responsibility as a startup community to lead the charge. We know that, by expanding opportunity for everyone, we can draw top talent to our city and build a robust ecosystem for technology and innovation in St. Louis.
We encourage local businesses of every size to uphold the wage increase and publicly demonstrate their support for our city’s working families, our economy, and our future. With enough supporters, we can send a message to Jefferson City that a higher wage floor benefits us all.