Missouri compares minimum wages to living wages

Story written by Abby Wade.

COLUMBIA  — It’s a question lawmakers and citizens have been grappling with in the wake of a bill recently vetoed by Gov. Jay Nixon; is minimum wage a living wage?

In 1998, a law banned counties in Missouri from raising minimum wages in densely populated areas. On July 10, Nixon vetoed a bill that would have restricted all local governments from raising minimum wages.

This has left city officials to consider new wage minimums. Petitions recently approved by city governments have begun to circulate with the intention of raising the wage to $15 an hour in St. Louis and Kansas City by 2020.

Missouri’s current minimum wage, $7.65, rose from $7.50 on Jan. 1. But this number falls short of $9.88 per hour — $20,549 a year — in Boone County that constitutes a living wage, or the minimum amount needed to cover basic needs such as food, medical care, housing and transportation, according to livingwage.com.

Aaron Hedlund, an MU economics professor, argued that rising minimum wage only restricts the job market.

“In practice, I think small minimum wage increases don’t do much good or harm,” he said in an email. “But a drastic increase in the minimum wage would effectively shut the least skilled and least experienced out of the labor market, denying them crucial access to that first step on the job ladder.”

Hedlund called the minimum wage  “a ban on low-paying jobs,” not a decreed pay increase.

“In the short run, (employers) will increase pay to comply,” he said. “But they will also reduce hours, hires, and will look to consolidate people into fewer positions with more responsibilities.”

“To live independently on nothing but the minimum wage would undoubtedly be quite tough — especially in places with higher cost of living — but the minimum wage is no magic wand that can erase that tough reality.”

Hedlund concedes, however, that minimum wage is not a living wage; the debate exists in whether it should be.

“The economy is sort of like a game of musical chairs,” said Jeanette Mott Oxford, executive director of Empower Missouri, an activist organization advocating to improve social conditions. “In musical chairs, there aren’t enough chairs for everyone. When the music stops, someone will lose. In the economy, not everyone will get a living wage job, unfortunately. What’s cruel is how judgmental our society is toward workers who do not manage to secure a living wage job.”

Angela Hirsch, community services director of the Central Missouri Community Action Center, agreed.

“Most people that are working minimum wage jobs are not working full-time,” Hirsch said. “Full-time is considered 40 hours a week. Most people are working between 20 and 30 hours a week in those minimum wage jobs. You have to take it all into account; it doesn’t even come close.”

Indeed, to sustain a living wage of $41,063 with Boone County’s current minimum wage of $7.65 per hour, an adult with one dependent would have to work an average of 15 hours seven days a week with no assistance or government aid to make ends meet.

Hirsch says the state minimum wage should be raised because she believes it “has not kept up with the national inflation rate and should be increased to address that gap.”

Oxford agrees that minimum wage is not a sustainable income, but she takes it a step further. She believes raising the minimum wage is a step toward solving the problem of poverty.

“The strain of working more than 40 hours a week has terrible health consequences around blood pressure, stress, etc.,” she said. “The whole community suffers when parents do not have adequate time with their children … there are consequences to society.”

“When the minimum wage is increased, those wages are used to purchase good and services, increasing local economic activity,” reads a joint report by Empower Missouri and Vision for Children at Risk.

Gerry Lopez, 23, of Columbia, works on commission as a sales associate at Joe Machens Automotive Group, and said that, on occasion, his take-home pay is equivalent to the minimum wage. But, he says raising the wage in Missouri would raise the local cost of living and cause him to rethink his decision to live in Columbia long-term.

“One of the reasons I live in this town is because the cost of living is so low,” he said. “People think these things occur in a vacuum sometimes. They think, ‘Oh, give these people twice as much an hour and they’ll have twice as much money.’ It doesn’t necessarily work that way. What’s more important than just the raw number of dollars they have is the amount of buying power they have.”

And no matter which way the debate ends, Hedlund concluded that “minimum wage hikes (would) create a perverse mix of winners and losers.” 


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