What I refer to as the “Jobs Killing, Inflation Enlargement Act” is not receiving much attention for the upcoming November election. On the ballot, it is called Proposition A.
If it passes, Missouri law will change to increase the minimum wage to $15.00 per hour by 2026 and then continually rise each year based on the Consumer Price Index. This will make Missouri one of the most expensive places for small businesses to operate in the United States, with a higher minimum wage than the blue states of Oregon, Rhode Island, and Illinois.
Exempt from this law — there are always exemptions — are “governmental entities, political subdivisions, school districts and education institutions.” You may wonder why. The answer is simple. By law, all new propositions must include the cost to the state on the ballot language. With government institutions pardoned from participating in this new law, the cost to Missouri will be minimal.
For many of you, this is not necessary, but I will pass on a little lesson from Economics 101. If Proposition A passes, it will cause the price of doing business in Missouri to increase dramatically. This will give businesses three options: increase prices (increasing inflation), reduce worker hours, or go out of business.
Raising the minimum wage will eventually increase the price of food, gas, and the cost of living because our economy does not exist in a vacuum.
Whether you want to admit it or not we live in a global economy and we compete for jobs with not only other countries but also other states. In the eight states that border Missouri, only Illinois currently has a higher minimum wage than us. Five of our neighbors have a minimum wage of $7.25 per hour. Where do you think a factory owner would rather set up a business?
If Proposition A passes, don’t be surprised when factories start to leave Missouri. The ones who stay will adjust in other ways to remain competitive. A Harvard Business Review in 2021 “found that for every $1 increase in the minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%, while the percentage of workers with more than 30 hours per week (making them eligible for health care benefits) decreased by 14.9%.”
Another study by Charlene Marie Kalenkoski at Texas Tech University found that higher minimum wages “reduce entry-level jobs” specifically affecting the youth. This in turn delays their entry into the job market, training and lifetime income.
A high minimum wage in Missouri will not affect Amazon.com and other online businesses, which may compete with local mom-and-pop stores.
Why do we need to mandate a higher minimum wage? Currently, the minimum wage in Missouri is $12.30 per hour. No one has to work for minimum wage in Missouri, with many businesses like Walmart and McDonalds paying $15.00 per hour. A new employee can earn $15.50 to $17.00 per hour working in a factory.
Who do you know that works for minimum wage? If they do, then there is a reason for that.
Following a forced increase in the minimum wage, small businesses that cannot relocate to another state will raise prices, reduce the number of employees, their hours, or all three. It is overlooked that small business owners often reduce their income to keep employees working. Small firms, workers and owners alike, withstand the worst of an increase in the minimum wage.
I started working as the head janitor at Warden Publishing Co. when I was 12, earning 75¢ per hour. At that time, I could buy a Snickers candy bar for 10¢. My next job was as a lifeguard for the City of Owensville, which paid $1 per hour.
I was paid what I was worth, and that is what it should be. A business cannot afford to pay anyone more than they are worth.
Both of my sons, Jacob and Ethan, began their working careers at Walmart pushing carts.
Entry-level jobs teach us the importance of hard work and give employees experience in the workforce. When you fill out a job application, the first thing that an employer wants to know is your past work history.
The ballot for the November election can be found on page 10. The complete language for each proposition and amendment is also in this week’s Republican on pages 16-19. Vote no to save Missouri jobs and keep the cost of living low.
