The Missouri Legislature Was Right To Overturn Proposition A

At the Show-Me Institute, our economists and analysts have long been opposed to minimum-wage increases put before the voters of Missouri. Wages should be a contract between employers and employees that are determined by markets, not something legislated by the state.

That means employers and potential employees should be free to negotiate, agree, or disagree on compensation, and then employ or refuse employment. Of course, I am also for an economy that offers good jobs at high wages; the best and in fact only path to that is economic growth that increases the demand for labor, coupled with an educational system that teaches and trains people so that they can pursue the career of their choice.

In other words, freedom and good government produce more opportunity for everybody. Who could have known that?

Proposition A, which was passed by the voters in November 2024, increased the minimum wage, but it did more than that. It also instituted a complex sick-leave policy for most businesses in Missouri. Many of those same businesses already had more generous leave policies of various types than the one mandated by the new law, but even those businesses were forced by Proposition A to adjust their policies to the new formula. In some cases, those adjustments were going to be less generous to employees in order to adhere to the new requirements.

This is a perfect example of how a law can appear to do one thing—in this case, help employees—while actually doing the opposite—in this case, heaping transaction costs on business, and especially small business, and thereby discouraging those businesses from hiring employees and growing their companies in Missouri.

It’s not the fault of voters that they did not know what the effect of the law would be. Proposition A contained nine pages of detail that even lawyers have difficulty understanding.

The supporters of Proposition A made it a statutory proposition instead of a constitutional amendment because a statutory proposition is easier to get on the ballot. Because Proposition A was only a statutory change, it was within the authority of the legislature to adjust it, and fortunately the legislature has done so by eliminating the onerous sick leave provisions, moderating the minimum wage provisions, and vastly simplifying the burden on small business.

But this whole episode shows why we need initiative petition reforms in Missouri. It is too easy for interest groups to raise large sums of money so that they can mislead voters about complex initiative propositions that are deliberately written to hide their true purpose and likely effects. Even a good ballot summary can’t accurately convey the meaning of nine pages of inscrutable legal jargon.

We’re all for the people deciding the direction of their own government; in fact, we participate every day in the marketplace of ideas with a view to influencing Missourians on behalf of good policy. The initiative petition process is an important tool, but it should be designed so that voters, with a reasonable effort, can be aware of exactly what they are voting on and the choices they are being asked to make.