By Kathrine Olsen Flaate
Truman State University Index, March 3, 2011

The Missouri House of Representatives passed a bill Tuesday that would freeze Missouri minimum wage from exceeding the federal minimum wage, even if the Consumer Price Index increases.

If the cost of living increases, the minimum wage of $7.25 would not increase with it as it normally does. The federal minimum wage and state minimum wage currently are the same. The Missouri Senate still has to pass the bill before it is made law.

The Committee on International Trade and Job creation, which Representative Zachary Wyatt, R-District 2, is a member, voted 10-5 to bring the bill to the floor for vote.

"What the bill is asking for is that you take off the Consumer Price Index off the minimum wage and start repealing minimum wage because the statute still states that the minimum wage will be at the same level as the federal level," Wyatt said. "Minimum wage will only go up when federal minimum wage is increased."

Wyatt said that with inflation Missouri minimum wage would be higher than federal minimum wage within two years. Wyatt said the CPI will be affected by the current increase in gas price, and therefore he anticipates that the inflation rate will increase much faster than normal

Wyatt said he supports freezing the CPI for the next four years, then re-evaluating it.

Lew Prince, a business owner for 32 years, testified against the bill to the House.

"It is simply wrong for people who work 40 hours a week, 52 weeks a year and make $15,000 a year and just be barely able to support a family," he said.

With the cost of living increasing in Missouri, this would affect the people already having trouble keeping their head above water the most, Prince said.

He said there are economic reasons to oppose the bill. If customers come to his store and spend money, he will use it to pay an employee who is spending that money in another store, he said. It is part of a cycle, where "If [the money] stays in the same geographic area it creates a lot more business."

It is all part of simple, economic philosophy, he said.

The opponents of the bill stated in the bill summary on the House of Representatives website that Missouri voters previously passed the cost-of-living adjustment in the state minimum wage.

Prince said he supports the opponents of the bill and said most academic studies show minimum wage doesn't cost jobs.

"In fact, in many places it created jobs," he said. This [minimum wage] actually leads to more economic development, not less."

The proponents stated in the bill's summary that businesses would benefit from this proposed freeze. Allowing minimum wage to increase with the cost-of-living increases will make it more expensive to do business in Missouri, according to the proponents' statement in the bill summary.

Wyatt said he thinks the bill will benefit businesses that cannot survive a minimum wage increase.

"With the economy the way it is they are already struggling," Wyatt said. "This is going to make it to where they aren't going to struggle with another increase in minimum wage. That's my big thing. I want to protect my small businesses in the area and make sure they can survive the economy."

Prince said his business benefits if people have more money.

"Having my customers come in with an extra 10 or 15 or 20 bucks a week, is really good for my business and will be good for any local business," he said.

In Adair County, buying power already is weak as the poverty level is 23.4 percent, according to information from the 2009 U.S. Census Bureau. Despite this gap, the unemployment rate is 6.6 percent in Adair County, while it is 9.1 percent statewide according to the Northeast Missouri Community Action Agency.

Penny Miles, executive director of the NMCAA, said this indicates that approximately 72 percent of the people living in poverty in Adair County are employed.

Miles said poverty means not being able to cover for your basic needs.

"There is a misconception," Miles said. "You hear people saying if they could just get a job. But just getting a job is not enough. It must be a living wage job."

Prince said minimum wage is the basic level of trying to achieve a simple level of comfort.

It is important for minimum wage to keep increasing with the CPI, Prince said.

"Giving people access to the middle class is really what the American dream is about," Prince said. "Most of us are never going to get to become really rich, but most of us should have an opportunity to live decently."

The House Bill No. 61 is not yet scheduled for a State Senate hearing.

 (Additional reporting by Andrea Hewitt.)

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