By Ray McCarty
Missouri employers are disappointed with the results of two initiatives in the November 6, 2018, election including adoption of a 50 percent increase in the state’s minimum wage over five years and failure of a modest gas tax increase to fund vital transportation improvements.
The safety and condition of Missouri roads will continue to deteriorate until voters decide to step up and fund transportation improvements. We must hope our failing bridges and dangerous road conditions don’t lead to a major tragedy before we can convince voters to invest in our infrastructure.
Missouri has one of the largest state-maintained road networks in the state and ranks near the bottom in fuel taxes. The state legislature may soon be faced with the problem of providing state matching funds for federal highway funds. If matching funds are not provided, the state’s roads will deteriorate at an even faster pace as Missouri’s federal gas tax money will be spent by other states that have matching funds.
Missourians also voted for a massive increase in the state’s minimum wage. The first hike adds 75 cents per hour effective January 1, 2019, then will increase the minimum wage by 85 cents per hour each year for the next four years. Missouri’s minimum wage will grow to $12 an hour by 2023 under the measure, then will be indexed for inflation for 2024 and thereafter:
Missouri Minimum Hourly Wage
1/1/2024: $12.00 plus CPI (inflation)
Essentially, voters’ passage of a mandate increasing minimum wage by 50 percent in Missouri over the next five years will hurt lower wage workers in the end. Employers will need to cut hours or numbers of minimum wage jobs to balance the books because, as we all know, money still doesn’t grow on trees. The additional money that will be paid to minimum wage workers must be made up somewhere. Also, kiosks, self-checkout machines, and similar automation becomes more attractive as labor costs rise, so look for an increase in the number of machines replacing some lower wage workers. Finally, this increase in minimum wages will cause a ripple effect that will increase wages for higher level workers also. This could lead to inflation that also ends up hurting lowest wage workers the most.
The state should be investing in training to equip these minimum wage workers for thousands of higher paying, higher skilled jobs that exist right now. Employers are hungry for good, qualified employees that are willing to learn and work hard.
The impact of these two initiatives will be felt in Missouri for years to come. Perhaps after reality sets in, voters will reconsider. Until then, Missourians better get comfortable with ordering from kiosks and should be very careful when driving over Missouri’s crumbling roads and bridges.
Ray McCarty is the President/CEO of Associated Industries of Missouri.