Minimum wage: Sen. Bernskoetter discusses how the free market could be better for workers.

Travel across Missouri and you will see signs of an economy that is growing and expanding. New construction is going on, and more importantly to me, you see help wanted signs everywhere. I love the fact that our economy is expanding, and our employers are out there creating jobs and opportunities. New businesses are coming to Jefferson City, and employers are needing new employees to facilitate that growth. 

This spring, more than 200,000 signatures were submitted to the Secretary of State’s office to put minimum wage on the ballot. There are both pros and cons to raising the minimum wage. On one hand, raising the minimum wage can increase federal revenue through higher FICA tax contributions as a result of increased labor earnings. It can also increase consumer spending, reduce the numbers of Missourians living on the poverty level, and improve employee satisfaction, which can in turn improve employee productivity and decrease employee turnover. On the other hand, raising the minimum wage can make employers more inclined to raise the cost of their products and services in order to compensate for the difference, or they may reduce their number of employees altogether. 

Minimum wage in Missouri was last raised after the passing of Proposition B in 2018 that won over 62.3% of voters. This worked to raise the minimum wage from $7.85 to $12 in five years with cost-of-living adjustments thereafter. As of 2024, Missouri ranks 18th in highest minimum wage rates, and many entry-level jobs are already offering to pay more than $15 an hour — well above our state minimum wage of $12.30.

In my opinion, letting the economy and job creators set the floor for entry-level wages has led, and will lead, to higher pay for workers more than by having the government set what they guess the wage should be. When minimum wage is set by the government, it is based on an arbitrary number that is inconsistent with the free market. The minimum wage that is set by the government does not consider the differences in the cost of living between the different parts of our state. Minimum wage for St. Louis is going to be grounded on different cost of living needs than minimum wage in Cole County or in Hickory County, which is rated as the most poverty stricken county in the state. These places are geographically, socially, and economically vastly different. This is because the cost of living in the rural areas of our state is far less expensive than living in St. Louis or in suburban areas. These vast differences can be seen when looking at the property values in Columbia versus any rural area in the state.

I believe the free market would be far better at setting what the wage for workers should be than the government. Our job creators are closer to the ground level of this issue than bureaucrats in Jefferson City, and they know what pay needs to be to attract quality workers. They also understand the benefits that need to be provided. If they set a price for starting wages that is too low, then that business will not attract the workers they need. Currently, employment is tight, which is why you see ever-increasing wages for employees across the board. Businesses do not want to lose out on getting quality workers in the door because they couldn’t be competitive in the compensation they offer to their employees.

If minimum wage is put on the ballot and passes, Missouri’s minimum wage will rise to $13.75 an hour in 2025 and then to $15 an hour in 2026.

Sen. Mike Bernskoetter took office in 2019, serving the 6th Senatorial District. Before being elected to the Missouri Senate, he served as a representative for the 59th District in the Missouri House of Representatives.