Minimum Wage provides minimum advantages

Governor Blunt recently changed his mind about Missouri’s new Minimum Wage laws. Initially, January’s minimum wage increase applied only to non-tipped workers. However, this week Governor Blunt changed his stance on this issue, and is now telling restraunts and other service industry businesses that hire tipped workers that their wages must also increase from the Federal minimum of $2.13/hr to $3.25/hr, or half the state’s minimum for non-tipped workers. As one might imagine, the consensus on this change is divided evenly between those who stand to benefit and those who don’t.

Way back in 2006, before the min. wage increase, SMI released a study explaining why a min. wage increase might be bad for both concerned parties. Though the study mainly focused on the non-tipped wage of $6.50/hr, the same arguments hold for tipped workers: higher min. wages means less businesses able to pay that wage, which means more people without jobs. Furthermore, as an article in the Joplin Globe explained, min. wage hikes can have other unintended affects:

Mike Wiggins, owner of Continental Catering and Granny Shaffer’s restaurants in Joplin and Webb City, said Blunt’s declaration might cost tipped employees more than it benefits them. He said a higher income bracket, for instance, might make some ineligible for state medical services and day-care assistance.

While everyone can appreciate a little extra on their paycheck, that little bit extra can have an overall negative net affect. Inevitably, some waitpersons who now have jobs will find themselves in the unemployment line along with some of their former employers who, under the new requirements, could no longer afford to compete.