Missouri’s governor says raising the minimum wage will take ‘money out of people’s pockets’ — so he’s lowering it

Missouri Gov. Eric Greitens recently announced the $US10 hourly minimum St. Louis workers began receiving two months ago will revert back to the state minimum wage of $US7.70 on August 28, the St. Louis Post-Dispatch reports.

The $US10 hourly wage was slated to increase to $US11 an hour in January 2018, but Greitens cited economic consequences if he didn’t stop the ordinance from going through.

“It will kill jobs,” Greitens said of the increase, according to the Post-Dispatch. “And despite what you hear from liberals, it will take money out of people’s pockets.”

A court battle between the Missouri General Assembly and the City of St. Louis ensued from 2015 until May of 2017, ultimately resulting in the city wage increasing to $US10. A new bill in the Missouri Legislature, however, allows Greitens to prohibit any cities from creating their own minimum wage alongside the state minimum wage. Greitens said in his announcement that he will allow the bill to pass.

Greitens’ announcement comes amid a wave of states looking to increase their minimum wages, not reduce them. Last March, California Gov. Jerry Brown agreed to raise the state’s minimum wage to $US15 an hour by 2022. Many individual US cities have earlier plans to hit the same rate.

The Missouri governor’s claim that raising the minimum wage “will kill jobs” is unfounded from a research perspective.

In 2016, the National Employment Law Project released an exhaustive report looking at every federal minimum wage hike since 1938. Ultimately, the investigators found year-over-year employment increased 68% of the time after each wage hike. What’s more, the industries most affected by minimum wage more often saw jumps in employment: 73% of the time in retail, 82% in leisure and hospitality.

“These basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels,” the authors wrote. The only times when minimum wage increases correlated to a decline in employment were during or near recessions. In most other cases, there was a neutral or positive relationship.

When it was first created in 1938, the US federal minimum wage was 25 cents. As a percentage of GDP per capita, that would equate to a wage of about $US20 an hour.

While some local business owners welcomed the St. Louis minimum wage cutback, other St. Louis residents lamented not having the extra cash each month.

“If we’re making $US10 an hour, we’re going to go right back out and spend that money,” Wanda Roberts, a St. Louis minimum-wage work, told CBS News. With the reversal, she said she’d “go back to struggling.”