Missouri wage hike may hit November ballot

Andy Faucett: Higher market wages make the mandatory minimum wage a nonissue for his business.

Last edited 5:22 p.m., May 14, 2024 [Editor's note: An incorrect figure has been fixed.]

Voters may be asked to approve increases to the state’s minimum wage and mandatory sick leave provisions on an upcoming ballot.

On May 1, the group Missourians for Healthy Families and Fair Wages turned in more than 210,000 signatures to the Secretary of State’s office with the goal of raising the minimum wage from its current level of $12.30 an hour to $13.75 in 2025 and then to $15 in 2026 – with annual cost-of-living adjustments to follow. The measure would appear on the ballot in November, if certified.

The measure also would enable workers to earn paid sick leave, according to a news release from Missouri Business for a Healthy Economy, a coalition of business leaders and executives who support Missourians for Healthy Families and Fair Wages and its bid for a minimum wage hike.

The minimum wage issue will be a familiar one to Missourians who faced a similar proposition in 2018. That year, 62.3% of Missouri voters approved a similar ballot initiative to raise the state’s minimum wage through a stepped increase from $7.85 in 2018 to $12 in 2023.

That measure also established a process for further increases or decreases based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, according to Ballotpedia.

Of the signatures submitted for the new proposal, 107,246 must be determined to be valid in order for the issue to appear on a statewide ballot. The process is expected to be completed by Aug. 8, a spokesperson from the Secretary of State’s office told The Missouri Independent.

Missouri Business for a Healthy Economy states employees would earn one hour of paid sick time for every 30 hours worked. Employers with fewer than 15 workers would be permitted to limit usage to 40 hours per year, while those with 15 or more could set a limit of 56 hours per year.

Brian Hammons, chair of the board for the Springfield Area Chamber of Commerce, said the ballot initiative is something the board suddenly became aware of.

“We didn’t realize that this was an issue until just recently,” he said.

The measure is surprising, Hammons said, because of the provision in Proposition B that automatically increases the state’s minimum wage each year based on cost of living.

Hammons said the chamber has a process to determine whether it will take a position, and that will be triggered if the ballot proposal is certified. The chamber’s Legislative Policy Committee, which Hammons said he has been a member of for a number of years, will make a recommendation to the board for approval.

“For this year, our state policy doesn’t have anything specific on minimum wage,” he said. “It does say that we support an employer’s right to make workplace and employee policy decisions without intervention from the state.”

The chamber encourages market-based determination by employers on what they need to pay, Hammons said.

“We’ve seen over the last three to four years some strong increases in what employers have to pay in order to attract workers, in some positions more than others,” he said. “There’s still a shortage of workers in a lot of areas.”

Data released in April by the Bureau of Labor Statistics showed the median hourly wage in the state for all occupations is $21.67.

Business support
Andy Faucett, owner of Bambino’s Cafe LLC, representing Missouri Business for a Healthy Economy, said he is in support of the minimum wage hike and sick leave provision.

Faucett said the minimum wage increases since the 2018 passage of Proposition B have not been much of a factor for his business.

“Market wages had gotten to the point where the minimum wage wasn’t an issue,” he said. “You couldn’t hire people at minimum wage for a period of time.”

The good thing about having a livable minimum wage is that it stays constant so that employees can count on having a reliable wage, he said.

“We don’t start employees at minimum wage at Bambino’s, and we haven’t for a long time,” he said.

Before the 2018 ballot measure, Faucett said it was already clear Bambino’s would have to get to a $15-per-hour starting wage.

“We did that,” he said, adding that he had to raise prices a bit to get to that level, but not as much as he thought he would have to.

Bambino’s has about 70 employees at two locations, and its annual revenue is $3.2 million-$3.4 million, Faucett said. Faucett said he has owned the restaurant since the mid-1990s.

“When the minimum wage increases were proposed, everyone was afraid of what that would do to the economy,” he said. “What we’ve seen is that as wages go up, sales go up and revenue goes up.”

Many customers note the rising cost of dining out and attribute it in part to the minimum wage hike, he said.

“We do raise prices for various raises, but it’s definitely more related to issues with the price of food increasing,” he said.

At new and used record store Stick It In Your Ear LLC, owner Erik Milan, also speaking on behalf of Missouri Business for a Healthy Economy, said that like Faucett, he also pays his employees well over minimum wage already.

“There wouldn’t be anything changing for me – that would just be mandatory,” he said. “My guys do a good job. We wouldn’t be here and doing what we’re doing if it wasn’t for them.”

For businesses like his, Milan said, there’s not much of an industry standard for pay, as would be the case in a fast-food restaurant or a convenience store.

“I bought the business in 2019, and I worked for many employers before that. I know what it’s like not to be able to make ends meet,” he said. “I don’t want my guys to feel like that. I want them to feel like they have skin in the game and they’re able to come here and own it.”

Milan said all of his employees – he has four working full time, not counting himself – are knowledgeable and helpful.

“They all love music, they all love records, they’re all musicians, they’re part of the music scene,” he said. “Our whole lives have been about curating music. This is kind of like a playground for us all.”

They strive to make a welcoming environment for everybody, he said.

“That’s why I pay my employees what I do,” he said. “I want them to not just be here for a paycheck but to where they know that’s taken care of so they can take care of people who come in here and make their paycheck. It’s a circle.”

The store’s revenue last year was $700,000. He said payroll and inventory are nearly neck-and-neck as major expenses, with payroll totaling about $10,000-$11,000 per month and inventory ranging $10,000-$15,000.

“I’d love to be able to set up a 401(k) and health insurance,” he said. “That’s down the road.”

Milan said he offers two weeks of paid vacation time, and where sick leave is concerned, employees play it by ear, covering for each other as needed.

“I don’t have anything in place for paid sick time, but the guys can get as much time as they need without having to worry about their job,” he said. “As far as mandatory paid sick time, I don’t have anything like that in place, but I would not be opposed to it.”

At Bambino’s, Faucett doesn’t offer paid sick leave, but he also makes accommodations for employees who must call off for illness.

“In the restaurant business, people calling out, which is what it came to be known as, would cause places to shut down from time to time,” he said. “We found that it wasn’t the end of the world. If three to four people are out on one shift, it’s OK to shut down.”

He noted he tries to build redundancy into his scheduling and adjusts his prices accordingly to cover the cost.

Entry-level work and pay
Hammons is not only the chair of the chamber board; he is also president and CEO of Hammons Products Co., which is the world’s largest commercial processor of American black walnuts. It’s based in Stockton – a town with a population of 1,766 in 2022, according to the U.S. Census Bureau.

Hammons said his company hires some young workers who are in high school to their first jobs.

“It’s an opportunity to learn about working,” he said. “They can learn customer-service types of things, like how to make change. That’s really good for a young person to learn.”

As the mandated minimum wage goes up, it’s more difficult to hire very many workers like that, he said.

“They’ve got to learn quickly – they have to become productive fairly soon,” he said. “It does tend to limit opportunities for first-time workers.”

He added that from a businessperson’s perspective – not the chamber’s position – he feels minimum wage increases should have an exemption for first-time, entry-level workers.

He also believes the state should focus on work opportunities and on eliminating barriers that both employers and employees face with being able to work. Child care is a prime example.

“Those things are market-based, and they can make a significant difference to people and not disrupt the natural market, which I think can really take care of what the wage level should be,” he said.

Asked for his comment on the proposed ballot measure, David Overfelt, president of the Missouri Retailers Association, said his organization is not in favor of increasing the mandatory minimum wage.

“We oppose,” he said in an email. “It will significantly increase costs that will have to be either passed along to consumers or recovered through staff reductions and benefit cuts as well as possible closure of unprofitable locations.”

As for whether minimum wage increases cost jobs, research is mixed. A 2023 study published by the Wharton School of Business found that small increases in the minimum wage – like the 17% increase from $7.25 to $8.50 per hour – raise the wages of workers in the lowest employment rungs and has a barely noticeable effect on their employment. If that wage were to more than double to $15 per hour, low-wage workers would benefit in the short term, but in the long run it would lower employment rates of some 60% of noncollege workers.

Research from the University of California at Berkeley found fears of increased labor costs and fewer job opportunities to be overblown. The study found that an increase “kills job vacancies, not jobs,” noting the higher wage makes it easier to recruit and retain workers, who are likely to be more productive as well.