Aldermen hear stark divide over increasing city minimum wage
St. Louis aldermen heard from proponents — and a few critics — of a bid to raise the city’s minimum wage to $15 an hour from its current $7.65.
The Board of Aldermen’s Ways and Means Committee considered Alderman Shane Cohn’s bill, which would gradually raise the city’s minimum wage to $15 an hour by 2020. The bill would exempt businesses with 15 or fewer employees and companies with less than $500,000 of gross sales every year.
The committee didn’t vote on Cohn’s bill but is expected to hear more testimony on the measure in the next few weeks.
Some of the city’s heaviest political hitters — including St. Louis Mayor Francis Slay — have backed Cohn’s bill, saying that Missouri’s minimum wage of $7.65 an hour isn’t high enough.
“Seven dollars and sixty-five cents an hour doesn’t represent minimum wage; it represents poverty wages,” Cohn said. “At $7.65 an hour, most people cannot afford the basic essentials of life for themselves — let alone a family that they may be supporting.”
Jason Purnell, a professor at Washington University, told the committee that a higher minimum wage could lead to better health outcomes in economically struggling communities. Purnell has led a study called “For the Sake of All” examining the health and well-being of African Americans in St. Louis.
“Few people are in poor health as income increases,” Purnell said. “We also know that poverty has a particularly detrimental impact on health — and that poverty in childhood has effects well into adulthood," said Purnell. "Because income and poverty are so important to health outcomes, wages that support families are crucial to public health.”
But the proposal has received a cool reception from small business owners and some trade groups. That includes John Chen, who owns Urban Eats in Cohn’s ward.
While he said that he supported the “spirit” of Cohn’s bill, Chen called the legislation a “well-meaning but misguided short-cut approach to address a very deep social problem at the expense of small businesses and nonprofit organizations in the city.”
“If you push this forward without any plan or conditions, it will erode and undermine the real work of the two most effective pathways out of poverty — education and jobs,” said Chen, who added he pays his workers more than $7.65 an hour. “We believe there will be significant unintended negative consequences on both fronts.”
Right before the committee hearing, the Missouri Restaurant Association released a study saying that Cohn’s bill would cost the city roughly 3,100 jobs.
David Macpherson, an economics professor at Trinity University, wrote that such “impact estimates should be considered conservative,” primarily because “St. Louis is an independent city surrounded by communities where the minimum wage will still be $7.65, and where employers could easily avoid the dramatic mandate by crossing the city line.”
Cohn said that such claims of city businesses fleeing for the county if his bill passes “unfounded.”
“There’s research showing that when counties increase their minimum wage, there haven’t been mass exoduses out of that county,” Cohn said. “The city of St. Louis still has 320,000 people who live here. We’re one of the largest employment hubs, so we have a lot of folks who are working downtown and doing business throughout the city."
St. Louis policymakers are working on a tight time frame because of a bill known as HB 722. Some believe that the bill gives the city an Aug. 28 deadline to raise the minimum wage. (Others, like Sen. Kurt Schaefer, R-Columbia, doubt the city can legally raise the minimum wage – with or without the implementation of HB 722.)
But the bill needs to pass out of the Board of Aldermen for any legal battle to occur. And even though Cohn’s bill has eight co-sponsors, that’s not enough support to get his bill to Slay’s desk.
Some are on the fence about the measure, including Alderman Joe Vaccaro. The 23rd Ward Democrat supports raising the minimum wage, but added that $15 an hour may be too high.
“I believe that $15 an hour probably wouldn’t even make it out of here,” said Vaccaro, referring to the Ways and Means Committee. “If the idea is to put something through here that most people can’t support for whatever reason, that number might as well be $100 an hour. We have to come up with what would be a fair-minded number – one the city could support and one that businesses could support.”
Vaccaro’s ward shares a border with St. Louis County. He said he would be concerned that some of the businesses would move if Cohn’s bill is passed.
“I do have concerns. I’ve gotten calls from some of the restaurants in the neighborhood that I don’t know if they would close or not,” he said.
“We have a pretty good neighborhood and the businesses are well supported,” he added. “But I do think it would affect the price of what they would charge. And I’m getting calls from senior citizens that this would be inflationary and hurt them.”
Asked whether he would considered changing his bill to incorporate a lower minimum wage than $15 an hour, Cohn replied: “I don’t have a crystal ball and I can’t predict the future.”
“I don’t sit on the Ways and Means Committee; that’s going to be in their hands at this juncture,” Cohn said. “I’m working with the committee members to determine what the amendments and the potential [substitute bill] might look like.”