Estimating the Effects of a $12 Minimum Wage in Missouri

Nov 5, 2018

Missouri voters will decide on a ballot measure tomorrow that would gradually raise the state's minimum wage to $12 an hour. New research estimates the effects if Proposition B is approved.

According to the Missouri Budget Project, about 1-in-4 workers in the state - or 667,000 individuals - would see increased earnings of $2,400 each year as the result of a $12 minimum wage. Lindsey Baker is outreach and policy specialist with the think-tank. She said the economy would also experience a $1 billion boost.

"And that's because low-wage workers are very likely to spend their extra earnings directly in local businesses," Baker said. "This then increases demand for products and services in the local economy, which boosts job growth in the state economy more broadly."

If approved, starting next year the state's current minimum wage of $7.85 would increase 85 cents a year until it reaches $12 an hour in 2023. Some opponents have argued it could put an undue burden on small businesses.

Baker said raising the wage would allow the state to invest an extra $72 million each year in services that help communities and support the workforce.

"Seventy-two million dollars annually would pay for the salary of about 1,500 Missouri public school teachers," she said. "It would also pay for child care assistance for over 13,000 additional children per year, which would then allow their parents to work."

She added that a $12-an-hour minimum wage also would help 1-in-5 Missouri kids, and go a long way toward helping the nearly 100,000 full-time workers who live below or near the poverty line.