By Rudi Keller
Missouri Independent
(Photo- Heather Overstreet, owner of Top Dog Training in Boonville, explains the impact of a higher minimum wage on her small business. Her business includes a 10,000 square foot outdoor area to exercise dogs.- Rudi Keller/Missouri Independent)
It was a milestone for a business she started at age 16 by training dogs for friends of her mother. She innovated on the furnishings, refurbishing a bathtub left behind by the previous owner to use for dog washing. She built indoor kennels with room for 12 dogs and fenced 10,000 square feet outdoors to exercise dogs in daycare and overnight boarding.
But future expansion is on hold, Overstreet said, until she understands the impact of voter-approved Proposition A, which increases the state minimum wage, on her payroll and customers.
“It not only throws off my math, but it just is an entirely new challenge,” Overstreet said.
Under the provisions of Proposition A, Missouri’s minimum wage rose to $13.75 an hour on Jan. 1, up from $12.30 an hour. It will increase again to $15 an hour on Jan. 1, 2026, with future adjustments tied to inflation.
Along with increasing the minimum wage, Proposition A requires some employers to provide paid sick and family leave starting May 1. Businesses with revenue of $500,000 or more must provide one hour for every 30 hours worked, up to five days per year for businesses with fewer than 15 employees and seven days per year for larger businesses.
Overstreet, who is also a member of the City Council in Boonville, with a population of about 8,000, admits she didn’t pay close attention to the details of Proposition A. She expected a more modest increase and had hoped to hold prices steady in 2025. Instead, she will notify customers of a rate hike, she said.
She needs three employees to cover the hours she is open.
Overstreet hires young people, often for their first job, to care for boarded dogs, and starts them at minimum wage. Over the course of a year, the increase will add $3,247 to employer payroll costs for every full-time minimum wage employee — $3,016 for additional wages and $231 for additional Social Security and Medicare taxes
“With minimum wage rising, that’s at least one extra dog that I need per day, which I guess you could say, is no big deal,” Ovestreet said. “But this is a small town, and I’ve only had that shop for two years.”
Proposition A, placed on the ballot via initiative petition, passed in November with 58% of the vote with support from unions, workers’ advocacy groups, social justice and civil rights organizations, and a coalition of more than 500 business owners.
There was no large-scale opposition campaign prior to the election. But a court challenge filed in early December by major business advocacy groups asks the Missouri Supreme Court to invalidate the vote. And legislation filed in advance of this year’s session seeks to exempt 96% of private employers from the higher minimum wage.
Randy Vines, co-owner of a St. Louis business that also began as a home-based operation and a backer of Proposition A, said he’s sympathetic to Overstreet’s dilemma but argues that more money in the hands of workers helps the economy.
Other costs can squeeze profits as well, said Vines, who founded STL-Style, which makes merchandise themed to St. Louis for retail and wholesale markets, with his brother..
If the price of T-shirts goes up, for example, that has to be part of his pricing, he said.
“We’re kind of at the mercy of what the markets are doing and what the industry is doing in general,” Vines said. “So when costs go up for manufacturers, we have to, you know, pass that on.”
For most of the time since a federal minimum wage of 25 cents an hour was established in 1938, there was no Missouri law mandating a separate state rate. In 1990, lawmakers extended the minimum wage to all businesses, including those exempt under federal law.
The first ballot measure setting the Missouri rate above the federal requirement passed in 2006. It boosted the state wage to $6.50 an hour and required future adjustments based on inflation. The federal rate at the time was $5.15 an hour and had not been changed since 1997.
In 2018, when adjustments had increased Missouri’s wage to $7.85 an hour, voters passed a proposal boosting the rate in yearly increments until it reached $12 an hour at the start of 2023.
An inflation adjustment set it at $12.30 an hour for 2024. If Proposition A had failed, the inflation-adjusted wage for 2025 would have been $12.65 an hour, the Department of Labor and Industrial Relations stated in a news release.
The current federal minimum wage is $7.25 an hour, a rate that has been unchanged since 2009. The highest inflation-adjusted minimum wage was the Feb. 1, 1968, increase to $1.60 an hour, which is equal to $14.76 an hour.
Prior to November, opponents argued that increasing the minimum wage would cause inflation, job losses and slow the state’s economy. Supporters point to research that calls those assumptions into question, noting that the state’s unemployment rate has fallen faster since the start of 2019 than adjoining states that did not boost their minimum wage.
“Working families are the drivers of the economy,” Caitlyn Adams, executive director of Missouri Jobs with Justice Voter Action, said in a news release issued Dec. 30. “We are proud to take another step forward in building an economy that works for all.”
As he is leaving office, Gov. Mike Parson made job gains and low unemployment the top two bullet points in a news release listing the accomplishments of his administration, which began in June 2018.
Missouri added nearly 190,000 new jobs, saw more than $17 billion in new business investment and enjoyed unemployment that was as low as 2.1%, the lowest ever recorded, the release stated.
The impact of the increase will be significant for the economy, proponents estimated in filings used by State Auditor Scott Fitzpatrick to write the fiscal summary of the proposal. Based on 2022 data, backers said 330,000 Missourians making minimum wage will get a pay raise, and almost 200,000 earning more than the minimum would likely receive raises because their pay is tied to the minimum. Wage costs in 2026 will be about $850 million more than 2022.
Business groups opposed to Proposition A didn’t mount a campaign to defeat it at the polls. Instead, they are asking the Missouri Supreme Court to declare the election invalid, alleging the ballot language was misleading and incomplete.
And instead of ordering a second vote, the challenge seeks to have the initiative proposal tossed completely for combining the minimum wage increase with the requirement for businesses to provide paid sick and family time.
The court refused to hear the case before the increase took effect. Instead, the court appointed Cole County Circuit Judge Josh Devine as a commissioner to take evidence in the election challenge and report his findings by Feb. 10.
That could make it possible for the court to rule by the time the sick and family leave provision takes effect May 1.
By that time, there should be clear signals from lawmakers on whether they intend to step in.
A bill filed by State Rep.-elect Jeff Vernetti, a Republican from Camdenton, would exempt businesses employing almost half of all Missouri workers from the higher minimum wage.
The bill would exempt seasonal businesses or those employing 50 or fewer workers. The bill would freeze the minimum wage for those businesses at $12.30 an hour.
Vernetti represents the tourist regions around the Lake of the Ozarks, where he owns a small Italian grocery and is a partner in a baseball/softball complex that hosts tournaments and other events.
Under his bill, the grocery would qualify for an exemption as a small business and the ballpark business would be exempt as a seasonal operation.
“I want to pay employees the most that they can possibly make,” Vernetti said. “I just think the market should dictate it.”
According to the Bureau of Labor Statistics, Missouri had 231,753 private businesses in the first quarter of 2024. Of that number, 96% had fewer than 50 workers, employing 46% of the private workforce.
The state minimum wage law does not apply to government jobs. But it would have no effect on state government if it did — in 2022, lawmakers agreed to set $15 an hour as the base wage for all state government jobs.
As a freshman, Vernetti said he knows he will have difficulty getting action on his bill. But he said he’s encouraged by the reaction from other new lawmakers he met on the freshman tour and hopes to get a committee seat that will allow him to push for it.
Proposition A passed overwhelmingly in high-population counties and failed in 79 of 94 counties where fewer than 25,000 votes were cast. That highlights the cultural and economic differences between urban and rural areas, Vernetti said.
“You couldn’t get a person in, say, St Louis city, to look for a job that’s even close to the minimum wage,” Vernetti said. “But in a lot of rural Missouri, those are important jobs. If it continues to increase, businesses are going to have no choice but to cut lower paying jobs altogether.”
A bill with a smaller impact, filed by State Rep.-elect Carolyn Caton, a Republican from Blue Springs, would rollback the minimum for workers younger than 20. The minimum for those workers would be $12.30 per hour.
No bills changing the provisions of Proposition A have been filed in the state Senate.
Attempting to rollback the increase is short-sighted, Vines said. His business pays above minimum wage and has low job turnover even though most workers are part-time employees.
“If you’re at the point where you either have to pay everyone minimum wage and survive barely, or go under paying a little more than minimum wage, your business probably isn’t on stable footing anyway,” he said.
Overstreet, however, said she’s worried that customers will look for other options if she raises prices.
“Dogs are a luxury. They’re not a necessity,” Overstreet said. “I’ve had people leave already because they think I’m expensive.”
Boarding a dog overnight with Overstreet at Top Dog Training costs $40. Daycare costs $30. In much larger Columbia, about 25 miles east of Boonville, overnight boarding can be found starting at $55 and doggy daycare starts at about $40 per day.
“It’s good for them, the people receiving the minimum wage increase,” she said. “But like everything else you do, the rest of us are going to have to raise our prices on services or goods, essential or non-essential, luxury or not.”
It was a milestone for a business she started at age 16 by training dogs for friends of her mother. She innovated on the furnishings, refurbishing a bathtub left behind by the previous owner to use for dog washing. She built indoor kennels with room for 12 dogs and fenced 10,000 square feet outdoors to exercise dogs in daycare and overnight boarding.
But future expansion is on hold, Overstreet said, until she understands the impact of voter-approved Proposition A, which increases the state minimum wage, on her payroll and customers.
“It not only throws off my math, but it just is an entirely new challenge,” Overstreet said.
Under the provisions of Proposition A, Missouri’s minimum wage rose to $13.75 an hour on Jan. 1, up from $12.30 an hour. It will increase again to $15 an hour on Jan. 1, 2026, with future adjustments tied to inflation.
Along with increasing the minimum wage, Proposition A requires some employers to provide paid sick and family leave starting May 1. Businesses with revenue of $500,000 or more must provide one hour for every 30 hours worked, up to five days per year for businesses with fewer than 15 employees and seven days per year for larger businesses.
Overstreet, who is also a member of the City Council in Boonville, with a population of about 8,000, admits she didn’t pay close attention to the details of Proposition A. She expected a more modest increase and had hoped to hold prices steady in 2025. Instead, she will notify customers of a rate hike, she said.
She needs three employees to cover the hours she is open.
Overstreet hires young people, often for their first job, to care for boarded dogs, and starts them at minimum wage. Over the course of a year, the increase will add $3,247 to employer payroll costs for every full-time minimum wage employee — $3,016 for additional wages and $231 for additional Social Security and Medicare taxes
“With minimum wage rising, that’s at least one extra dog that I need per day, which I guess you could say, is no big deal,” Ovestreet said. “But this is a small town, and I’ve only had that shop for two years.”
Proposition A, placed on the ballot via initiative petition, passed in November with 58% of the vote with support from unions, workers’ advocacy groups, social justice and civil rights organizations, and a coalition of more than 500 business owners.
There was no large-scale opposition campaign prior to the election. But a court challenge filed in early December by major business advocacy groups asks the Missouri Supreme Court to invalidate the vote. And legislation filed in advance of this year’s session seeks to exempt 96% of private employers from the higher minimum wage.
Randy Vines, co-owner of a St. Louis business that also began as a home-based operation and a backer of Proposition A, said he’s sympathetic to Overstreet’s dilemma but argues that more money in the hands of workers helps the economy.
Other costs can squeeze profits as well, said Vines, who founded STL-Style, which makes merchandise themed to St. Louis for retail and wholesale markets, with his brother..
If the price of T-shirts goes up, for example, that has to be part of his pricing, he said.
“We’re kind of at the mercy of what the markets are doing and what the industry is doing in general,” Vines said. “So when costs go up for manufacturers, we have to, you know, pass that on.”
Minimum wage history
The first ballot measure setting the Missouri rate above the federal requirement passed in 2006. It boosted the state wage to $6.50 an hour and required future adjustments based on inflation. The federal rate at the time was $5.15 an hour and had not been changed since 1997.
In 2018, when adjustments had increased Missouri’s wage to $7.85 an hour, voters passed a proposal boosting the rate in yearly increments until it reached $12 an hour at the start of 2023.
An inflation adjustment set it at $12.30 an hour for 2024. If Proposition A had failed, the inflation-adjusted wage for 2025 would have been $12.65 an hour, the Department of Labor and Industrial Relations stated in a news release.
The current federal minimum wage is $7.25 an hour, a rate that has been unchanged since 2009. The highest inflation-adjusted minimum wage was the Feb. 1, 1968, increase to $1.60 an hour, which is equal to $14.76 an hour.
Prior to November, opponents argued that increasing the minimum wage would cause inflation, job losses and slow the state’s economy. Supporters point to research that calls those assumptions into question, noting that the state’s unemployment rate has fallen faster since the start of 2019 than adjoining states that did not boost their minimum wage.
“Working families are the drivers of the economy,” Caitlyn Adams, executive director of Missouri Jobs with Justice Voter Action, said in a news release issued Dec. 30. “We are proud to take another step forward in building an economy that works for all.”
As he is leaving office, Gov. Mike Parson made job gains and low unemployment the top two bullet points in a news release listing the accomplishments of his administration, which began in June 2018.
Missouri added nearly 190,000 new jobs, saw more than $17 billion in new business investment and enjoyed unemployment that was as low as 2.1%, the lowest ever recorded, the release stated.
The impact of the increase will be significant for the economy, proponents estimated in filings used by State Auditor Scott Fitzpatrick to write the fiscal summary of the proposal. Based on 2022 data, backers said 330,000 Missourians making minimum wage will get a pay raise, and almost 200,000 earning more than the minimum would likely receive raises because their pay is tied to the minimum. Wage costs in 2026 will be about $850 million more than 2022.
Rollback efforts
And instead of ordering a second vote, the challenge seeks to have the initiative proposal tossed completely for combining the minimum wage increase with the requirement for businesses to provide paid sick and family time.
The court refused to hear the case before the increase took effect. Instead, the court appointed Cole County Circuit Judge Josh Devine as a commissioner to take evidence in the election challenge and report his findings by Feb. 10.
That could make it possible for the court to rule by the time the sick and family leave provision takes effect May 1.
By that time, there should be clear signals from lawmakers on whether they intend to step in.
A bill filed by State Rep.-elect Jeff Vernetti, a Republican from Camdenton, would exempt businesses employing almost half of all Missouri workers from the higher minimum wage.
The bill would exempt seasonal businesses or those employing 50 or fewer workers. The bill would freeze the minimum wage for those businesses at $12.30 an hour.
Vernetti represents the tourist regions around the Lake of the Ozarks, where he owns a small Italian grocery and is a partner in a baseball/softball complex that hosts tournaments and other events.
Under his bill, the grocery would qualify for an exemption as a small business and the ballpark business would be exempt as a seasonal operation.
“I want to pay employees the most that they can possibly make,” Vernetti said. “I just think the market should dictate it.”
According to the Bureau of Labor Statistics, Missouri had 231,753 private businesses in the first quarter of 2024. Of that number, 96% had fewer than 50 workers, employing 46% of the private workforce.
The state minimum wage law does not apply to government jobs. But it would have no effect on state government if it did — in 2022, lawmakers agreed to set $15 an hour as the base wage for all state government jobs.
As a freshman, Vernetti said he knows he will have difficulty getting action on his bill. But he said he’s encouraged by the reaction from other new lawmakers he met on the freshman tour and hopes to get a committee seat that will allow him to push for it.
Proposition A passed overwhelmingly in high-population counties and failed in 79 of 94 counties where fewer than 25,000 votes were cast. That highlights the cultural and economic differences between urban and rural areas, Vernetti said.
“You couldn’t get a person in, say, St Louis city, to look for a job that’s even close to the minimum wage,” Vernetti said. “But in a lot of rural Missouri, those are important jobs. If it continues to increase, businesses are going to have no choice but to cut lower paying jobs altogether.”
A bill with a smaller impact, filed by State Rep.-elect Carolyn Caton, a Republican from Blue Springs, would rollback the minimum for workers younger than 20. The minimum for those workers would be $12.30 per hour.
No bills changing the provisions of Proposition A have been filed in the state Senate.
“If you’re at the point where you either have to pay everyone minimum wage and survive barely, or go under paying a little more than minimum wage, your business probably isn’t on stable footing anyway,” he said.
Overstreet, however, said she’s worried that customers will look for other options if she raises prices.
“Dogs are a luxury. They’re not a necessity,” Overstreet said. “I’ve had people leave already because they think I’m expensive.”
Boarding a dog overnight with Overstreet at Top Dog Training costs $40. Daycare costs $30. In much larger Columbia, about 25 miles east of Boonville, overnight boarding can be found starting at $55 and doggy daycare starts at about $40 per day.
“It’s good for them, the people receiving the minimum wage increase,” she said. “But like everything else you do, the rest of us are going to have to raise our prices on services or goods, essential or non-essential, luxury or not.”
5 comments:
Prices increase anyway. It feels like once every two months when the establishments I visit on a regular basis hike their prices, increasing the minimum wage and giving people sick leave is not doing that much to contribute. I have sympathy for small business owners who might take a harder hit, but at the same time nobody wants to work for $12 an hour when everything else is so expensive.
This “feel good” amendment will increase prices, put small businesses out of business and eliminate jobs. Its “goal” of making minimum wage a “livable” wage is going to do the opposite. It will increase prices to where $15 won’t be a “livable” wage. Then it flattens out the chances for increases in wages and for the employees that have worked their “way up” in companies find their money is worth less
We need to change the amendment process to make it a percentage of votes, like a city revenue bond. 57.1%.
The Costs and Prices of Goods and Services goes up all the time - whether or not the Minimum Wage goes up or not. So, it should be Fair that the Minimum Wage goes up to help these Workers Pay for the Current Prices so they can Survive. Today's Businesses - have to be Competitive / Profitable / Managed Well - to stay in Business and Support Themselves, their Employees, and their Customers. This is Capitalism, which Supports - Free Markets, Competition - Not Socialism - where Government Controls - Production, Distribution, and Set Prices of Products.
Take for instance - while there have been periods of rising and falling home values, the end result is this: In the past 20 years, the average home price in the U.S. has grown from about $140,000 to about $340,000, as of April 2023. Costs will continue to Rise - Basic Economics - Businesses tried to Reduce Manufacturing Costs by Sending everything Offshore - We found out that during Covid we could not Build Cars because of Chips and other items Manufactured overseas - that were disrupted due to Supply Chain.
What People need to understand is that Minimum Wage will only allow you to Exist and Barely Survive - It is important that we Teach our Kids that when looking at their Future Careers that they Invest their Time and Money or Your Money in College, Technical Schools, and/or Education that they will be able to use to make a good living and not just a Living to Exist or Barely Survive.
How many People (and their Parents Co-Signed) Borrowed Thousands of Dollars for them to go to College and Found out that after spending $100K to get a Bachelor's Degree that their Majors were Useless in the Market and they could make more Money as a Door Greeter - Then they spend the Rest of their Lives Paying Off the Debt on Worthless Degrees and/or Investing in More Worthless Degrees and then asking Liberal Democrats to Cancel or Forgive their Student Debt Costing - the United States Millions of Dollars - Because they Made Piss Poor Life Decisions that the Rest of Us have to Pay For?
So, Spend Time Talking with and Educating your Children - So they don't Invest in Worthless - Education and/or Training - just to Learn that they have Wasted that Financial Investment and Time to have a Sheet of Paper that is Valueless in the Marketplace. Don't Wait - Help Prepare the Future Generation - With the Facts on what they will need to do to Not just Survive, but to Prosper in the Future.
FYI - Walmart's Live Better U program offers associates the opportunity to earn a bachelor's degree at no cost. The program is available to full- and part-time hourly and salaried associates - So check out what Options are Available from the Companies you Work At - It Might Surprise You.
As long as profits and prices are rising, so too should minimum wage
The root cause of this needless cycle is our government isn't willing to regulate wealth.
There is nothing wrong with being rich, but you have to pay your fair share back.
Raise minimum wage, then restrict these greedy companies from jacking up prices for the sole purpose of ensuring people like Jeff Bezos can buy a few more yachts.
SirPwn4g3 - I agree with you on a few of your comments. We should set the Minimum Wage, I believe that the Government should Never Set - Prices, Production, or Distribution - then it is not Capitalism, but Socialism.
What would Truly make every person equal is a Straight Flat Tax or Consumption Tax on Goods or Services that uses the same Percentage (%) - No Mater Income or Goods or Services Purchased - Everyone would Pay the same Percentage (%). So, whether you make $15 / Hour or $500 / Hour - You Pay the Same Tax Percentage or if you Buy a $35,000 / Auto or $250,000 / Auto - You Pay the Same Tax Percentage on those Items.
Never should a Government Restrict your Opportunity to make as much Money as you want - but everyone should play equal when it comes to paying
The Same Tax Percentages (%) - Whether - Flat Tax or Goods or Services Tax - Everything is then Equal - No Special Deductions or Tax Write Offs - Everybody plays with One Percentage (%).
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