Missouri residents can expect an increase in minimum wage within the next four years. Voters passed Proposition B, a measure placed on the 2018 Midterm ballot that will gradually increase minimum wage to $12.00 an hour by the year 2023. It will take effect starting Jan. 1, 2019.
Currently, 20 states will raise their minimum wage in 2019. Some of the states that will see the biggest increase are Oregon, Massachusetts, and Washington.
Missouri will not be the first state to implement an increase of minimum wage. In 2014, Seattle increased their wage from $9.47 to $15.00 per hour.
Some believe the raise can help ensure a higher standard living for everyone, like Richard Glahn, the organizing director of Missouri Jobs for Justice. “You should not be telling a full-time worker… that they are only worth $314 a week, $16,000 a year. That is simply not enough to survive on in any community in this state,” Glahn said on St. Louis Public radio discussing the positives of increasing the wages earned. The youth could use the money to save up for future expenses such as college and other school opportunities offered through the school district.
Another politically active campaigner took a stand on voting ‘yes’ on the ballot for Proposition B. Claire McCaskill, Democrat opponent of Josh Hawley, Republican, for the senate seat, took her stand on St. Louis Public Radio. “It is a shot in the arm for all the people that work at minimum wage. And make no mistake about it. This isn’t just a few people. I think people like to gloss over this and say ‘Well, nobody works at minimum wage’. We have over 100,000 parents in Missouri working for minimum wage.”
While high minimum wage can help low-skilled workers, it also can a negative impact on businesses, thus causing them to rethink prices, employee’s jobs, and future employers to come. Josh Hawley, the newly elected senator in the 2018 midterms, opposes the Proposition. “I’m not sure the wage increase that’s on the ballot this fall is a good idea. It’s a little out of the mainstream, in terms of the types of wage increases you might see,” Hawley said on St. Louis Radio after his campaign stop in St. Louis.
Ray McCarty, president and CEO of Associated Industries of Missouri, also encouraged people to vote ‘no’ on their ballots for Proposition B. “Reducing hours, reducing the number of these jobs… those are not good solutions,” he said.
According to a study by Lendedu.com, showed that 25.6% of employers will “raise the price of my small business’ products/services”. Therefore, this means that the youth could be paying higher costs for fast food during lunch times, school supplies in August, and for necessary clothes for school such as jeans, t-shirts, and coats. An issue released by The Heritage Foundation written by James Sherk, Higher Fast-Food Wages: Higher Fast Food Prices, says fast food could increase in prices substantially. “Restaurants would need to raise prices by 38% while seeing their profits fall by 77%.”
Businesses have to consider increasing their prices because that is the only way they can make profit when paying employees $12.00 per hour. This could put the business at risk of losing customers, thus causing the stores to shut down. “Higher prices would, in turn, drive customers away, forcing even larger price increases to cover costs,” the issue said.
When there is an increase in pay, it could mean that the youth could get laid off because the company will keep employees that have more experience and are more skilled workers. In a study by FRBSF.org, they found that for every 10% increase in the wage floor, there is a reduction in teen employment by 1%. This could be a problem for students who are paying for their college or in some circumstances have to provide for family because they can’t get employed because businesses will focus their priorities on the most skilled workers in the job.
Not only would it be a problem for getting laid off, but this could also prevent students from learning the basic skills to become an employer for a higher-level job in the future. When the business has to limit how many employees work for the company, it can prevent the youth to experience and establish the foundation for other jobs. “In the limited time they work in the fast-food industry, they gain basic employment skills—such as how to work reliably, follow instructions for a supervisor, and work constructively with co-workers,” the issue said. “Eliminating entry-level jobs makes it harder for workers to advance into higher-paying positions.”
As the new year is right around the corner, it will mean a raise of minimum employment. While there are pros of the increase in wage like giving students the ability to start saving responsible for college and other expenses and in some circumstances, allow the youth to provide for their family, it can also have a negative impact on local and smaller businesses.