JEFFERSON CITY — Missouri business owners and hourly workers voiced mixed opinions Wednesday about whether the state should change its minimum wage law.
Several business owners told a House panel that lawmakers should repeal a minimum wage law Missouri voters approved in 2006 and instead keep its minimum wage equal to the federal rate. The 2006 law provides for annual increases based on the pace of inflation in the Midwest.
The business owners said Missouri's minimum wage should stay equal to the federal minimum, $7.25 per hour, to help businesses get through the current economic downturn. The repeal would keep wages for tipped employees at the current rate of $3.63 per hour until federal law pushes that rate higher. The federal minimum wage for tipped employees is currently $2.13 per hour.
Restaurant owners said holding the current rate at $3.63 instead of letting it increase with inflation is vital to helping them stay in business because labor costs are a large part of their expenses. They said their employees often make much more, after tips, than the regular minimum wage.
"It sounds like a little bit of money, $1.50 an hour, but I have a lot of hours of tipped servers," Greg Hunsucker, owner of V's Italiano Ristorante in Kansas City, said of the difference in wages for tipped workers since 2006.
Hunsucker said he pays many of his workers more than the minimum wage for tipped workers.
The repeal's sponsor, Rep. Jerry Nolte, R-Gladstone, noted that seven of the eight states surrounding Missouri have minimum wages equal to the federal minimum wage. Nolte said that makes Missouri less appealing to businesses and companies may take jobs to states with lower minimum wage requirements.
"This would suppress our ability to create jobs at exactly the time when we need to be," he said.
Members of a labor rights group called Missouri Jobs with Justice said the state should keep its current law in place. They said it helps workers keep up with price increases for things they need, such as food and housing.
"To working people (a minimum wage increase) really isn't a raise," said the group's director, Lara Granich. "It's really just a way of making sure you don't fall behind."
Alluding to lawmakers' desire to cut spending and balance the state's budget this legislative session, Granich also told committee members that workers who don't make enough to keep up with inflation end up relying on state service funded by tax dollars.
Lew Prince, the owner of a vinyl record store in University City, said paying more than the minimum wage has helped him hire better workers than national chains paying minimum wage.
"I can compete on service," he said. "If we can force the large out-of-state companies to compete with me, I have the advantage."
Mark Parkinson, R-St. Charles, said he has seen pink and black bumper stickers from Prince's business on many cars around the state. When the lawmakers said that demonstrated the loyalty of the store customers, Prince said the loyalty is the result of close ties his customers have to his employees.
"They're loyal to Matt and Orlandez and the 23 other employees who work here because they're really good at what they do," he said.
The House Committee on International Trade and Job Creation is likely to vote on the bill next week.