Missouri state law (Section 290.502.2) requires that the state’s minimum wage must be adjusted every year based on the latest cost of living.
In charge of making that change is the Director of the Department of Labor and Industrial Relations. Director Todd Smith said that in August of 2008, the Department predicted an increase of 40 cents for 2009/
“A review of the Consumer Price Index (CPI) for July 2008 confirms the Missouri minimum wage rate will increase to $7.05 effective January 1, 2009,” he predicted at the time.
That prediction has become a reality. The Missouri minimum wage, pegged to the cost of living, went up precisely 40 cents on January 1, 2009, increasing from $6.65 to $7.05 an hour. According to the Missouri Department of Labor and Industrial Relations, last year’s increase was a mere 15 cents per hour. The much higher rise in the cost of living has driven the dramatic increase in the Missouri minimum wage rate.
Those businesses that earn less than a half-million dollars annually need not comply with the Missouri minimum wage law. Those workers employed by companies that are involved in interstate commerce are protected by the federal minimum wage. That currently stands at $6.55 an hour, and is scheduled to go up on July of 2009.
Some commentators are concerned that the large hike will have a negative impact on smaller employers in Missouri, particularly when combined with lower sales and higher operating costs.
The U.S. Bureau of Labor Statistics each year publishes the CPI for Urban Wage Earners and Clerical workers, and this figure is the one used by Missouri to establish its minimum wage rate.
Interestingly, Missouri is one of the few states that allow the minimum wage to go down if the CPI declines.
In those cases where a worker is eligible for payment under either the federal or state minimum wage, the higher benefit trumps the lower one. In Missouri’s case, the state minimum wage, now at $7.05 an hour, exceeds the federal level, at least until July 2009, so the state minimum wage has precedence over the federal rate.
