On November 5, 2024, Missouri voters voted in favor of Proposition A. According to the Missouri Department of Labor, Proposition A will raise the minimum wage to $13.75 from $12.30 starting January 1, 2025, and mandate paid sick leave beginning May 1, 2025.
In May of 2024, a campaign titled Missourians for Healthy Families and Fair Wages sent in 210,000 signatures in an attempt to get the law proposed on the ballot. Their attempt was successful, and it held support from over 500 small business owners and 130 various Missouri organizations.
According to the US Department of Labor, the federal minimum wage has stayed fixed at $7.25 since 2009, but many states have implemented their own minimum wage laws. According to the Center for American Progress, the federal minimum wage is worth 30 percent less than it was when it was first created. They claim that it is a poverty wage, and for a two-person household to stay out of poverty a worker would need a wage of $9.83.
Since 2016, the minimum wage in Missouri has increased each year by at least five cents without fail. In 2015 and 2016, the minimum wage was $7.65. Currently, in 2024, the minimum wage is $12.30. This is an increase of $4.65 in just eight years. Although it may not seem like it, that is a substantial increase.
Currently, the highest minimum wage is in Washington D.C. at $17 per hour. According to the National Conference of State Legislatures, 34 states, districts, and territories in the United States have minimum wages higher than the federal minimum wage. The other 16 states have maintained the $7.25 an hour federal minimum wage created over 15 years ago.
Upcoming in 2025, due to the results of Proposition A, Missouri is planning on raising the minimum wage to $13.75. That is a total increase of $1.45. In addition, Proposition A will raise it to $15 in 2026. This is the most considerable change we have seen in recent years and will have a significant impact on workers and many aspects of our economy.
Following 2026, it will be adjusted every year according to the Consumer Price Index (CPI). The CPI is an index that measures the monthly change in prices paid by consumers in the United States.
According to the Missouri Independent, Missouri’s top business groups, such as the Associated Industries of Missouri, the Missouri Chamber of Commerce and Industry, the Missouri Grocers Association, the Missouri Restaurant Association, the National Federation of Independent Business, and three individuals associated with these groups have filed a lawsuit against Proposition A with the state Supreme Court.
According to AP News, these groups have argued that this change will have detrimental negative impacts on Missouri’s business and that it is unconstitutional because Missouri voters were misled about how much the law will cost local governments and which companies and workers it will apply to.
An example of voters being deceived is that it was not made abundantly clear that the paid sick leave would not apply to all workers. Those who are exempt include government employees, retail or service workers who work for a business that makes less than $500,000 a year, people who have been incarcerated, and others.
According to AP News, many leaders of the minimum wage campaign have argued against Missouri’s big business groups, claiming that they are trying to undo the will of the voters.
While the topic seems to spark a lot of debate between the working class and business owners, there are many potential positive and negative impacts on the economy of raising the minimum wage.
The Committee on Education & the Workforce Democrats states that raising the minimum wage would stimulate consumer spending, boost businesses’ income, and grow the economy. They claim that it would improve worker productivity and reduce employee turnover. They also state that the federal minimum wage of $7.25 leaves an adult with two children thousands of dollars below the poverty threshold.
On the contrary, Northwood University states that although the benefits of increasing the minimum wage may seem substantial, it has consequences that are often overlooked. They claim that employers may hire fewer workers to cut back on costs when the minimum wage is higher, leading to a lessened opportunity to find jobs, millions left out of the labor force, and a reduction in employee work hours. Another main argument is that since businesses are spending more paying their employees, consumers will be charged higher prices to make up for the losses.
With many noteworthy points to consider, being aware of the changes is essential as January is right around the corner.
