The Missouri House on Tuesday endorsed capping the state's minimum wage at the federal rate, a move that would essentially reverse a voter-approved measure that allowed minimum pay increases based on inflation.
Supporters said the legislation would help companies compete against those in other states and improve Missouri's business climate, arguing regular minimum wage increases could force employers to lay off workers and raise prices for their goods.
"We cannot sustain unchecked, unlimited growth in the minimum wage and expect to retain and create and protect jobs in the state of Missouri," said Rep. Jeff Grisamore, R-Lee's Summit. "We have got to support this to be competitive with other states and protect jobs and protect small businesses in Missouri."
Voters in 2006 approved a ballot measure that raised Missouri's minimum wage and allowed it to rise above the federal level based on annual inflationary adjustments. The measure passed with 76 percent of the vote. House Democrats said Tuesday that state lawmakers were wrong to overrule the initiative.
"What part of "The people have spoken' don't you guys understand?" said Rep. Jake Zimmerman, D-Olivette.
House Majority Leader Tim Jones, R-Eureka, said the minimum wage ballot measure now is a law and that the Legislature has a duty to review all of Missouri's statutes and determine where changes are needed.
The House legislation would limit the state's minimum wage to the federal minimum wage. It would require Missouri workers who earn tips - such as waiters and waitresses - to be paid $3.63 per hour. The measure needs another vote before moving to the state Senate.
Currently, Missouri's minimum wage is $7.25 per hour, which is the same as the federal minimum wage. Missouri employees who earn tips must be paid $3.625 by their employers; however, businesses must make up the difference if workers do not earn enough from tips to hit the $7.25 minimum wage.
Federal law requires tipped employees to be paid at least $2.13 by their employers if workers earn enough money through tips to hit the minimum wage.
Critics of the bill defended the minimum wage, saying increases could boost the state's economy by increasing how much money workers would have available to spend.
Several business owners previously urged state lawmakers to change the minimum wage law, contending it could help employers get through the economic downturn. The measure was among six priorities identified by a coalition of business groups for the legislative session.
"As the minimum wage increases, the ability of employers to continue to employ workers is damaged, particularly affecting entry-level workers," said Dan Mehan, the president of the Missouri Chamber of Commerce and Industry. "Missouri employers want the opportunity to reinvest these funds into their business in order to expand their work force thereby reducing unemployment in the state."