The Minimum Wage Still Needs to Be Raised

Glenn Koenen

The wages that a company will pay workers is dependent on the competitive market wage for a given skill set. That means that a company is a wage taker, which is simply another way of saying companies must pay competitive wages in order to obtain workers. www.Investopedia.com

Alas, economists tend to live in a simplified, idealized world – like the Kardashians.

“Must pay competitive wages” no longer applies.

Years back a friend (quite successful in the franchise business) explained that he didn’t set the price for his product: his competitors did. While he sold better goods, he could only charge a moderate premium over what others took. As a result, he could only pay a bit better than they paid, the ‘law of supply and demand’ be damned.

All along 76 Highway in Branson motels use their sign boards to seek Housekeeping and Front Desk workers. Everyone needs workers. Yet, all pay essentially the same and no one offers anything except seasonal, part time jobs. That means only the poorest and most desperate come to Taney County seeking work, hired folk quickly leave for marginal jumps in pay or hours, and that constant need for more warm bodies consumes precious management time. Add it together and you get a recipe for continued, worsening poverty among working folk.

A few employers are acting. CoxHealth, out of Springfield, announced last week that they were raising their minimum wage to $9.50 an hour, from $8.08. [ Branson Daily Independent and Springfield News-Leader 8/4/17 ] “If we can invest and make people’s lives’ better, that’s what we want to do,” Steve Edwards of Cox noted. Monday’s News-Leader editorial praised that decision but admitted it’s politically hard to raise wages in Missouri. [ http://www.news-leader.com/story/opinion/editorials/2017/08/07/our-voice-coxhealth-shows-leadership-wage-hike/545972001/]

Most employers, meanwhile, continue to pay as little as they can. They do not pay more to get better workers, they do not seek that competitive advantage.

The only 21st Century answer: government must substantially raise the minimum wage now.

► A federal minimum wage of $12.00 per hour would put thousands of dollars more each year into the hands of millions of struggling families.
► A Missouri minimum wage of $14.00 per hour would attract workers to Branson and other far-flung parts of the state.
► An urban Missouri wage of $15.00 per hour in greater St. Louis, greater Kansas City, Columbia/Jefferson City and Springfield would provide stability to workers in higher-cost areas.

As we all know, St. Louis and Kansas City have acted to raise the minimum wage – only to be trounced by people elected by Nixa, Camden and Canton.

The Show Me Institute is running radio ads stating that raising the minimum wage will ‘hurt the very people we want to help.’ The institute calls for a state Earned Income Tax Credit, [ http://showmeinstitute.org/ ] while keeping the minimum wage down where it is.

I, too, want to see a state EIC. Yet, I can’t ignore that while a state EIC, along with food stamps and many other programs, help families they also act as government subsidies to low-paying employers.

With the Trump and Greitens’ administrations looking to slash benefits assisting working poor families, the only humane option is to let employees earn more for their work. If every employer must pay more there is no competitive impact – not even for those employers accepting of mediocre work from poorly paid workers.

Still, I live in the real world. What should happen probably won’t happen. Students will still be taught the Law of Supply and Demand, even if that law has been repealed here in Missouri.

Submitted by Glenn Koenen, WCD Member