Minimum Wage Change

1 decade 1 year 9 months ago Thursday, July 26 2007 Jul 26, 2007 Thursday, July 26, 2007 2:17:18 PM CDT July 26, 2007 in News

The state minimum wage is higher than the new federal minimum wage now, but in the future, the federal wage could be more than Missouri's. As the federal wage will increase by a set amount, Missouri's will be adjusted each year.

Currently, Missouri beats the federal minimum wage at $6.50 an hour compared to $5.85. Next January, the state wage will get a cost of living increase and the federal wage will go to $6.55. In 2009, the state wage will get another cost of living increase and the federal wage will climb to $7.25. That's where analysts and employers think the federal wage will surpass the state wage.

The effects of the federal wage for Missouri will not be immediate, but could make a difference in the future.

When college student Sarah Davis got a job at a local tanning salon, she wasn't surprised about getting paid minimum wage.

"I thought it was fair and I had worked retail, you know where I'd started out at minimum wage to so I was just kind of expecting that," said Davis, a Tiger Tans employee.

She was glad when Missouri raised its minimum wage in January and glad for the country when the federal government approved the national increase.

"I think it'll be good, I think it needs to happen," said Davis.

Her boss said the new federal minimum wage increase may affect the way she pays her employees down the road.

"Budgets need to be adjusted now, so that they can have that set aside, or projected at least, what their sales are going to be," Tiger Tans owner Brenda Jacobsmeyer said.

One labor expert said he thinks the federal wage will surpass the state's.

"It's not until 2009 where the federal rate is $7.25 that it will probably be higher than the state rate," said Paul Rainsberger, Director of Labor Education, MU extension.

Other business owners said minimum wage never affects how they pay their employees.

"Well as it happens, market forces are such that we have to pay more than minimum wage anyway," said Kurt Mirtschings, Director of Marketing for Shakespeare's Pizza. "Currently in Missouri, it's $6.50 our starting rate is $7, so it's sort of irrelevant."

Whichever minimum wage is higher will be the rate employers use. For Sarah Davis, whether it's the state or the federal government, she's looking forward to more money in her pocket, no matter who's making the rules and no matter when it happens.

Some businesses are exempt from the minimum wage increases. Small service and retail stores that make less than $500,000 a year do not have to pay their employees minimum wage. Companies do not have to pay apprentices or trainees minimum wage.

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