St. Louis Minimum Wage Increase

Here locally in St. Louis, like many other cities in the country, the discussions around the minimum wage increase to $15/hr have been going back and forth for some time now. The St. Louis Business Journal posted an article today on the subject, “Facing business backlash, the city plans tweak to minimum wage hike“. I’ll post the full article at the bottom of the post.

The original bill proposed moving to $10/hr immediately and then working up to $15/hr by 2020. The “tweaks” that the city is looking at are moving those down to $8.25/hr immediately and working up to $15/hr by 2024. That change seems pretty drastic so I’m guessing they got some pretty heavy backlash from the local businesses.

I do feel like the press doesn’t cover this correctly as they are looking for the big headline like “local businesses oppose minimum wage hike”, etc. But when you actually do research you’ll see that the local businesses, especially restaurants, have some good arguments in that if the wage increase only affect St. Louis City they’ll lose business to neighboring St. Louis County restaurants who are not affected, currently, by the increases. Especially here in St. Louis where the city is trying to increase the amount of business downtown I can see how this could have a negative affect. So it’s not that these business owners are against paying higher wages, necessarily, but rather worried about trying to compete with other nearby businesses that aren’t being affected by the wage increases. With higher wages will come price increases to consumers and that will affect traffic.

The increase is coming across the board soon enough, some areas will be slower to adopt than others so there will be this in between time that will cause some debate. I have copied the full article below:

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A proposed bill to increase minimum wage in the city of St. Louis to $15 an hour by 2020 could get a tweak in committee to extend its timeline for implementation, a move aimed at easing concerns voiced by some businesses.

The bill’s sponsor, Alderman Shane Cohn, said at a hearing of the city’s Ways and Means Committee Tuesday that he planned to introduce substitute language that would increase the minimum wage to $8.25 an hour immediately — down from $10 an hour in the original bill — and gradually increase it to $15 an hour by 2024, rather than 2020.

The proposed new language would also give exemptions for nonprofits, student workers and tweak language in the bill regarding restaurant franchises, Cohn said.

Cohn has in the past described the $15 threshold as a “goal.”
Tuesday’s meeting brought out a capacity crowd, many with T-shirts and signs with slogans such as “Show Me 15” supporting the increase. Speaking before the committee both in support and opposition to the bill were residents, business owners and organization leaders.
Among them was Robert Bonney, CEO of the Missouri Restaurant Association, whose organization announced earlier in June that a study it commissioned found that a $15 an hour minimum wage would lead to a loss of 3,100 jobs in the city’s restaurant industry. At Tuesday’s meeting, Bonney said that restaurants typically have low profit margins, at about 3 percent. In the first year, the wage increase, to $10 an hour, could lead to a loss of $27,200 for what Bonney described as a typical restaurant owner, he said.
Maggie Crane, a spokeswoman for St. Louis Mayor Francis Slay, said in an interview that the mayor’s office found that 74 percent of restaurants in the city would be exempt from the new wage because they fall below a $500,000 sales threshold outlined in the bill. Research out of the mayor’s office also disputes some of the economic models the restaurant association’s study uses.

John Iovaldi, owner of Pietro’s Restaurant in south St. Louis, called the proposed $15 an hour minimum “totally ridiculous” and said, “It’s not a sustainable thing.” With about 25 full-time employees plus part-timers, he said in an interview that he might have to cut jobs to make up the loss. He added that the increase would put city restaurants at a “competitive disadvantage” to those in nearby St. Louis County.
Another business owner, Sonny Saggar, founder of the Downtown Urgent Care clinic, said the wage hike would be good for businesses by adding income to the city’s population base. “Some companies are fighting this bill so they can continue paying low wages,” he said. “When workers have more money, businesses have more customers.”
Some local business groups have openly opposed the wage hike, including Downtown STL Inc. and the St. Louis Regional Chamber, which said earlier this month that more than 65 percent of its members were against the proposal.

State Sen. Kurt Schaefer, R-Columbia, has said that even if St. Louis preempts a bill that would prohibit municipalities from raising the minimum wage beyond the state’s, other laws prevent the city from taking action.
Slay, who originally proposed the increase, and his allies have said the move is legal and needed because some workers and their families are forced to use public assistance to get by.
The Ways and Means Committee will discuss the proposed wage increase again at 1 p.m. Wednesday.

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