St. Louis Post Dispatch Editorial, Oct 25, 2011
Wonder why the folks occupying Wall Street and Kiener Plaza are angry? It's this kind of thing:
Last week, the Missouri Chamber of Commerce, the state's biggest business lobby, cheered because the Missouri economy was so weak that the minimum wage would not be raised.
"At a time when Missouri businesses are struggling to provide jobs in today's difficult economic climate, it is good news that labor costs will remain stable and competitive compared to other surrounding states," wrote chamber President Dan Mehan.
Three cheers for low-paying jobs!
It will be recalled that the chamber successfully lobbied for tax breaks for corporations earlier this year and then supported another corporate tax cut in the failed special legislative session.
We supported some of those breaks because they might bring jobs to the state amid an economic downturn. But those jobs won't help much if they don't pay a decent wage so that workers can bring stability to their families.
Mr. Mehan's pay, it should be noted, isn't tied to the growth of the economy, as are the wages of Missouri's minimum-wage workers. In 2009, including bonuses and retirement benefits, Mr. Mehan was paid $237,447. Last year, his total compensation rose to $245,964. That's an increase of 3.5 percent.
Other business advocates do even better. Dick Fleming, president and CEO of the St. Louis Regional Chamber and Growth Association, makes about three times that much.
We don't begrudge them their salaries and bonuses. If the chambers' members think their leaders are worth that much, that's their decision.
It just unfortunate that Mr. Mehan, who did get a raise, would feel compelled to say that it's good news that minimum-wage workers won't.
Missouri voters were smart in 2006 to tie an increase in the state's woefully low minimum wage to the consumer price index. That means that, unlike some other states with automatic increases, Missouri's minimum wage can rise or fall with the economy, as long as the wage stays at or above the federal minimum, now at $7.25 per hour.
Had the economy had a better year, with say 3.5 percent growth, low-wage workers would have received a two-bit raise.
While Missouri's low-wage workers get nothing more, total compensation at large financial services companies rose 5.7 percent last year, according to The Wall Street Journal.
Anger toward CEO pay isn't about envy; it's about fairness. It's about top executives getting theirs no matter the state of the economy while workers receive furloughs, pink slips or wage freezes. It's about American CEOs being paid 343 times what their average workers make, the largest such gap in the world.
That is the current American economic model, and it's not working. What the economy needs most is spending from a reinvigorated middle class.
Numerous studies have shown that, historically, minimum-wage increases have had a statistically insignificant effect on hiring. Nobel laureate Robert Solow, an economist from the Massachusetts Institute of Technology, has reached that conclusion; so has Harvard economist Richard Freeman.
But it's always been a matter of theology for business groups like the Missouri Chamber that even a meager uptick in the minimum wage would be devastating. If they want to believe that, so be it; people believe a lot of weird things. But in this kind of economic climate, maybe they should believe it quietly.
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