Measure will reestablish minimum wage preemption in Missouri
Citing a recent study by economists at the University of Washington that indicated Seattle’s minimum wage increase had harmed the very people who proponents claimed it would help, Governor Eric Greitens indicated, in a statement released late in the day on June 30, that he will allow House Bill 1194 to become law on August 28, 2017, without his signature. Once effective, the legislation will reenact minimum wage preemption in Missouri and reinforce that no city or municipality has the authority to enact a higher wage floor within its boundaries.
A Missouri governor has three available options on bills approved by the legislature: sign the bill, veto it, or allow the legislation to take effect by taking no action before a constitutionally mandated deadline.
When Seattle lawmakers approved an incremental increase of the city’s wage floor to $15, they claimed the measure would help low-income workers. However, the UW study estimates the average low-wage worker saw their pay decrease by $125 per month as the wage progressed toward $15.
Although Seattle’s $15 hourly minimum is not yet fully phased-in, problems have already surfaced. Some employers, unable to afford the incremental increases, cut payroll costs by reducing employee hours or letting workers go, the study found. Other businesses relocated beyond the city limits or closed altogether.
Calling the work of the UW economists “very credible,” and “sufficiently compelling in its design and statistical power that it can change minds [regarding the merits of extreme minimum wage mandates],” David Autor, an economist at the Massachusetts Institute of Technology who was not involved in the study, noted, “If I were a Seattle lawmaker, I would be thinking hard about the $15 an hour phase-in.”
During the 2017 legislative session, MRA worked extremely hard to pass HB 1194. MRA members made numerous trips to the Capitol to speak with legislators and presented compelling testimony at House and Senate committee hearings. Once effective, HB 1194 will preempt and nullify all political subdivision ordinances, rules, and regulations currently in effect or later enacted relating to the establishment or enforcement of a minimum wage or the provisions of employee benefits.
Accordingly, the minimum wage in St. Louis City will revert to the statewide standard of $7.70 an hour on August 28. The city’s wage floor rose to $10 on May 5 of this year as a result of a surprise decision by the Missouri Supreme Court on February 28, which overturned an almost identical 1998 law on procedural grounds and thereby allowed a St. Louis City minimum wage mandate to stand. The St. Louis wage would have further increased to $11 at the beginning of 2018.
HB 1194 will also keep the minimum wage in Kansas City at $7.70. There, the city wage floor would have been set to rise in stages to $15 as a result of an August 8 municipal election, or if voters failed to approve the ballot measure, then to $13 as a result of an ordinance passed by the Kansas City Council on March 9, 2017.
Other municipalities would have been free to adopt local ordinances of their own, and Missouri could have become a confusing patchwork of hundreds of different local minimum wage laws.
A recent article in The Washington Post announced the results of the study by the University of Washington economists. The Governor’s decision was reported in recent online editions of the St. Louis Post-Dispatch and Kansas City Star.