How St. Louis Workers Won and Then Lost a Minimum-Wage Hike

Bettie Douglas has worked at a McDonald's in St. Louis for 10 years. For the last three months, she's made $10 per hour. On Monday, when she got to work, she was working for $7.90 per hour.

Douglas didn’t get demoted, she isn’t in trouble with her bosses, and she didn’t change jobs. What changed is that a new Missouri law went into effect Monday, capping the minimum wage across the state at $7.70. The law overturned higher minimum wages set by St. Louis and Kansas City, in effect cutting many low-income workers’ take-home pay overnight.

“It’s horrible. It’s ridiculous. It’s just ridiculous,” Douglas told me during a break from her shift on Monday. She’s an activist who has been involved in the Fight for $15 and in a group lobbying St. Louis businesses to maintain the higher threshold voluntarily. “I have bills to pay, just like everybody else. I don’t get any type of assistance. What makes them think that anybody can live off of $7.90? I’m not asking them for anything I haven’t earned. I’ve earned $10 after 10 years.”

Leaders in the city of St. Louis agreed, and in 2015 they passed an ordinance designed to slowly increase the city’s minimum wage to $11 per hour. The move was challenged in courts, but the city eventually prevailed, and in May, the hourly base wage rose to $10 per hour. The following month, Missouri’s Republican-dominated General Assembly passed a law capping the minimum wage statewide.

This is known as a preemption law, because it involves the state government preempting local authority on a given matter—just as the federal government sometimes preempts state authority. As I wrote in The Atlantic earlier this year, there has been a major wave of state preemption laws around the country in recent years, the fruit of an era in which cities—even in traditionally conservative areas like the Deep South—are increasingly liberal, while conservative Republicans hold unprecedented control of state governments.

Progressives, finding themselves shut out at the state level, are attempting to enact new liberal policies in their home cities. And Republicans, who have long extolled the value of local control, have acted across the board to prevent them from doing so. The range of preemption laws is enormous, including culture-war issues like North Carolina’s controversial “bathroom bill,” HB2, in 2016, but many of them concern business interests. A city moves to ban hydraulic fracking or the use of plastic shopping bags or puppy mills or sugary drinks, and then the state smacks them down.

Minimum-wage laws are among the most common preemption laws. As the left-leaning Economic Policy Institute writes in a report released this weekend, 25 states have passed laws preempting local salary increases since 1999, more than half of them in the last five years.

Preemption laws raise a host of philosophical questions. While Americans have traditionally had a great deal of reverence for local control, its statutory power is fragile. The U.S. system holds that cities are creations of the state, and so state government can overrule them where it wants (unless it violates constitutional strictures like equal protection). When so many cities are more liberal than the states in which they are located, progressive citizens who get preempted are effectively entitled to less self-determination. Municipal leaders argue that cities have far different needs from rural areas. For example, gun control may seem superfluous in rural areas where guns are mostly used for hunting, but local authorities sometimes like stricter gun laws to control for crime in urban areas. Likewise, higher minimum wages are more important in cities, where the cost of living is far higher.

But minimum-wage laws add another new layer to the debate: race. The people in minimum-wage jobs are disproportionately African American, which means that increases disproportionately help them—and preemption laws disproportionately work to keep them at lower salaries. There are even wage differences within bottom tranches of the ladder. In the lowest wage sector, which is food service and accommodation, black workers in St. Louis make 81 cents for every dollar their white counterparts earn, according to new data from the Partnership for Working Families. The state legislature is 87 percent white. PWF found similar results across several other cities in states with preemption laws, including Atlanta; Cleveland; New Orleans; Durham, North Carolina; Birmingham, Alabama; and Memphis, Tennessee, with black workers averaging 80 cents on a dollar in the sector to white ones.

“Preemption is portrayed as a struggle between political parties, but state interference in city minimum wage laws stems from a larger Jim Crow legacy of blocking economic policies that primarily benefit communities of color,” said Nikki Fortunato Bas, the executive director of PWF. “Both Democratic and Republican governors have approved preemption laws, but in most cases, it’s predominantly white legislatures overturning municipal laws passed by majority black cities. Ending this ugly pattern of white interference is critical to realizing racial and economic equity.”

While Missouri’s law is only one of many preemption laws on wages, it is unusual if not unprecedented in actually reversing an increase that has already gone into effect. (Kansas City voters also voted to increase the minimum wage in August, and that hike briefly went into effect, meaning that Kansas City workers also briefly saw a raise.)

Douglas, who is African American, said the extra money she earned for those three months made a real difference in her life. She works full-time and cares for two sons, and she says she doesn’t want a hand-out but thinks she should be able to provide for her family with a full-time job. With the higher wages, she was able to start paying down old bills, but now she’s not sure how she’ll keep her electricity on.

“Yesterday I wasn’t really able to eat, because I wanted to make sure [my  16-year-old son] eats. I’m robbing Peter to pay Paul,” Douglas, 59, said. “I’m not asking for a million dollars. I’m not talking about going on cruises.” (P&P Restaurants, which owns the franchise where Douglas works, did not immediately respond to a request for comment.)

According to MIT’s living-wage calculator, the living wage for a single adult in St. Louis County is $10.43 per hour. For an adult and two children, it’s $26.44. The poverty wage for an adult and two children is $9 per hour—less than what Douglas made for the last three months, but more than her new, reduced salary.

The rise of minimum-wage preemption laws has been driven by business interests, and in particular by the American Legislative Exchange Council, or ALEC, which has circulated model legislation taken up by many states. ALEC and other business groups argue that a “patchwork” of wage laws in different places makes it difficult for companies to do business. But lots of laws work by patchwork, and different workers make different amounts even in the same place. ALEC did not immediately respond to a request for comment.

In approving the law, Missouri Governor Eric Greitens, a Republican, cited a study of the effects of Seattle increasing its minimum wage to $13 per hour, part of a planned increase to $15 per hour. The study found that while some workers benefited from the increase, others saw their hours cut, resulting in a net decrease in their take-home pay. As my colleague Annie Lowrey wrote when the study came out, it is a single study, and it’s at odds with years of other work on minimum-wage increases. Seattle also set its wage higher than other cities. But it is a real-world example that calls into question what the tradeoffs of higher wages might be.

From many conservatives’ standpoint, large increases in the minimum wage are an undue intervention in the free market. But the market isn’t working for low-wage workers. The federal minimum wage has been stalled at $7.25 per hour since 2009. Adjusted for inflation, it actually peaked in 1968, when workers made $8.68 per hour in 2016 dollars, according to Pew. That means earnings for many of the lowest-wage workers have stagnated or slowly deflated for decades. And now, for some workers in St. Louis and Kansas City, they’ve actually taken a sudden dive.