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St. Louis Embraces Basic Economics and Lowers Minimum Wage
I’ve often highlighted the economic insanity of massive minimum wage hikes and the jobs lost as a result. But one Midwestern city is going the other direction. No, the mayor and aldermen of St. Louis didn’t decide to take an Economics 101 class at their local community college; the state government forced their second largest city back to sanity.
In 2015, the city raised its minimum wage from the state level of $7.70 an hour to $10. The Republican-dominated legislature passed a law mandating that all cities adhere to the Missouri standard. It goes into effect on Aug. 28.
Gov. Eric Greitens said that St. Louis’s $10 minimum wage would “kill jobs, and despite what you hear from liberals, it will take money out of people’s pockets.” He added, “government imposes an arbitrary wage, and small businesses either have to cut people’s hours or let them go.”
The Gateway City’s current wage isn’t as bad as San Francisco’s $13 or Seattle’s $15. But both of those cities were met with shuttered businesses and lost jobs. A recent report on Seattle showed that following their steep hike, the average low-wage worker made $125 less per month as employers cut their hours or let them go.
The St. Louis law was scheduled to raise to $11 in January and then regularly increase with inflation. The Mayor, Democrat Lyda Krewson, called the new state law “a setback for working families” and is exploring options to put a statewide raise of the minimum wage on the ballot.
Before the mayor does that, I recommend she spend the weekend with some remedial reading.
Published in Economics
There is no such thing as a Republican anything in the city of St. Louis. Like most cities. Will this ever change ? Stupid surely seems like it is forever.
I’m not sure this is a good idea. I mean the collar ‘burbs around Saint Louis will suffer by not having all of Saint Louis’ businesses move out to them. They are missing a chance to let the people of Saint Louis demonstrate economics through falling on their faces and destroying their city. Failure is how people learn.
Okay, let me restate that: failure is an opportunity that may lead to learning for some.
Still, I am generally for governmental control at its most local, if at all. It is perfectly within the powers of the state to do this, however.
Looks like an interesting natural experiment of the sticky wage theory. Sure, a pure test would involve changes in market conditions only, but interesting nevertheless.
How do employers respond. Reduce wages to new market? Reduce them somewhat? Use layoffs and re-hires to lower wages without formally cutting anyone’s wage? The last is cowardly and profitable, so never a bad bet really.
At a minimum, wage growth for those at $10 per hour could be glacial.
Minimum wage has always been $0.00 and always will be.
Nice to know there is still a GOP out there somewhere willing to bring on the sanity.
How sad that after so many failures, the Left is so brainwashed that they are completely unable to learn from their mistakes.
Hey @jon I guess I’m hooked on OAN now, because I caught you the other night talking to Liz. Always a great conversation!
That’s what I was thinking. If I were a Missouri legislator, I might have voted against this. Number one, if Saint Louis drives some business out of the city, some might relocate to my district. Number two, if cities have the freedom to impose their own misguided minimum wage laws, it takes pressure off of legislators from the big cities to try raising the minimum wage for the whole state.
In Washington state, when Seattle started suffering from the minimum wage hike and they saw business moving out to the edges, they got the state to pass a state wide hike so business couldn’t get away and all of us could suffer with them. Yay.
Too bad. Another Republican against subsidiarity.
And we also have a Democrat who is opposed to subsidiarity. A pox on both their houses.
Wow, Jon wasn’t joking. I had to look it up:
Senate – Republican (25) Democrat (9)
House of Representatives – Republican (118) Democrat (45)
How the heck did Claire McCaskill get elected to the U.S. Senate, and then re-elected?
The way to elevate people who are poor is to enable them to make money. If you say you have to pay $15 an hour for work that makes anybody who can’t make $15 an hour obsolete. We should accept that many Americans don’t have the skills to make the $15 wage and focus on improving their skills to make more money. Reality always triumphs over theory.
And if you also provide a welfare benefit that decreases as they work, they don’t have incentive to work.
What is the principle “unit” of federalism and subsidiarity? Interesting question for conservatives. Non-question for leftists.
My experience says that state legislative seats are the most representative and competitive level of government. If conservatives think that gun rights, charter school reform, tort sanity and corporate/individual taxpayer rights are better respected by the godawful city manager/staff dominated municipal and special district setup, I feel they are living politics in their head.
The question, sadly, is irrelevant for St. Louis. Ever been there? I mean the doughnut hole of the city within the prosperous metro area. If it could learn from failure, St. Louis would be Enrico Fermi by now. St. Louis and East St. Louis have lost nearly 70% of their population in my lifetime, while Houston (same pop. in 1960) has tripled in population.
The $11 minimum wage was the final act of racialized leftwing political insanity which has destroyed a once great American city. Greitens and the Missouri GOP should be applauded for an act of mercy. Discussing issues of subsidiarity and federalism re St. Louis is comparable to discussing the need to watch the carbs with John Belushi the week before he died.
One of the saddest spots in our country, unless you’re enjoying day baseball at Busch (one of the quintessential American experiences, according to this Mets fan).
How do Democrats and pretend Republicans expect to pull the underclass, the products of our educational system and welfare state back into the work force if we must pay them more much more than they are worth. We know the original minimum wage law was aimed at blacks moving north to price them out of the work force. It still works that way for everyone who finds themselves with zero work skills and a lousy education. We have to change our narrative. Job loss, business failures and inflation, are much more difficult to demonstrate and of less interest to the majority who have reasonably secure jobs and expect to gain from minimum wage hikes yet this remains our narrative. Rather, minimum wages must be condemned for their role in expanding an underclass that is increasingly violent and dangerous. It is a racist project to destroy blacks and keep them dependent on the welfare state, criminal activity and voting Democrat. It may not be supported consciously for these reasons but that is the effect.
She is a shrewd liar and very smooth. She ran as a center est . Tod Akin her exponent (in her first run) committed harry-carry with his “legitimate rape” comment. Game over. The next run she successfully sold her center est stick. If the Republicans can find a strong candidate, she is toast.
Todd Aiken received thousands of campaign dollars during the primary from McCaskill’s people. Missouri had a strong Tea party former Mo state treasurer in Sarah Steelman. She would have clocked McCaskill, but with St Louis county money and McCaskill money, Aikens was able to narrowly defeat Streelman. It was sickening. Maybe she has future political plans. She is in Greiten’s government at the moment. Todd Aiken was indeed a dummy with that rape comment. But it was also a case of typical Republican party desertion. The Dems would have rallied around one of their candidates and with their team mates, the media, would have hushed that comment out of existence. The Republicans, OTOH, withdrew national financing and to a man, woman, and personal pet, turned their backs on him.
There is no principle unit of subsidiarity. The principle is to handle the issues at as local a level as possible.
It’s not about which unit gives you the results you want on your agenda.
I don’t like it when Republicans override local control on topics that ought to be under local control. Those Republicans are no better than Democrats.
All you said is true. However, Akin made an unrecoverable mistake. If the Republicans would have rallied around him it would not have mattered. He should have bowed out and Steelman take his place. I asked him with multitudes of others on his facebook page. This was his fowl and his to fix. No, he wanted the office more and took the impossible risk. Aragant coc.
This was one of the cogs of what was the perfect storm of Obamacare
The original purpose and continuing effect of minimum wage is to keep black men out of work. People who support a high minimum wage favor putting young black men out of work.
I remember the Akin mess; it was the same as our Clayton Williams mess that got Texas the terrible ‘Ma’ Richards for 4 years.
But, how did she win RE-Election? That’s where I’m confused.
Never confuse a Progressive with facts. What matters is feels.
That was the re-election…2012 against Akin. Her next assignment, if she chooses to accept it, will be the Senate race for her 2nd re-election in 2018. She manages to speak to issues in a way that almost sounds conservative, but she never breaks party rank when she votes (unless her vote is meaningless). See Susan Collins, Republican, for an opposite example. I think McCaskill will retire. There is a young Democrat from around my parts named Jason Kander who will go for her seat, no doubt.
Austin Peterson who came in second place for the Libertarian Party presidential nomination, has decided to run for this Senate seat as a Republican.
At first read, I thought, meh. But on second thought…let’s see what he’s got.