No. 7: Minimum wage hike successful at the polls

To say that the minimum wage hike was a key ballot issue is an understatement.

The last time Missouri’s minimum wage changed was 1997, when the federal minimum wage increased to $5.15 an hour from $4.25.

An organization called Give Missourians A Raise collected 135,917 valid signatures to get the issue put before voters this year.

And even though the increase passed, there are some critics in the business community.

“Having a minimum wage law is counterintuitive to what the laws of supply and demand are,” said Mike Briggs, president of Willow Brook Foods Inc., in a September interview with Springfield Business Journal.

Opposition

Jim Kistler, executive vice president of Associated Industries of Missouri, said his group opposed the increase because employers in surrounding states would gain a competitive advantage.

Arkansas, Oklahoma and Kansas have minimum wages less than $6.50 an hour.

Give Missourians A Raise said increasing minimum wage will give 256,000 Missourians more income, which will in turn pump an additional $21 million into Missouri’s economy and generate as much as $4.3 million in new taxes annually.

Conversely, Kistler wrote in a September column for SBJ, “The vast majority of minimum wage jobs are not held by single parents struggling to support their children. Instead, most minimum wage jobs occur in families with multiple sources of income, which explains why more than half of the impact of Proposition B will go to families with an income greater than $40,000 and nearly a third of the new wages will go to families earning more than $60,000 per year.”

David Mitchell, assistant professor of economics at Missouri State University and director of the university’s bureau of economic research, said increasing minimum wage would mostly spur inflation, with wages and cost of living finding a natural equilibrium again in five years.

“It impacts everyone in the long run, because all that it really does is raise costs,” Mitchell said in September.

“If we could make everyone rich by legislating it, we would. Why stop at $6.50 an hour? Why not legislate everyone to make $50,000 a year? … But then, of course, a gallon of milk would cost $10, and a gallon of gas would be $14.50. It’s all relative. So, by raising the minimum wage, you’re not really accomplishing anything. That doesn’t really fight poverty,” he added.

Both proponents and opponents of the minimum wage increase will observe the good and bad effects of the increase during the coming year as the increase is implemented.

Gaining Income

1997: The federal minimum wage is increased to $5.15 an hour from $4.25.

March 14, 2006: Missouri Secretary of State certifies the official ballot title, putting the minimum wage issue on the ballot.

Nov. 7: Missouri voters – 76 percent of them – approve an increase of minimum wage to $6.50 an hour.

Jan. 1, 2007: The increased minimum wage will take effect for Missouri employers.[[In-content Ad]]