Economics 101: Missouri Fails

I woke up this morning to the depressing news that working families in Saint Louis Missouri will be earning $2.30 less an hour than they did yesterday. That is because the Missouri State Assembly passed a law earlier this year that prohibited any municipality from enforcing a minimum wage above the state minimum wage.

I am depressed because I now know that greater Saint Louis’s estimated 2.8M workers will all, in aggregate, be earning $2.30 less an hour and spending less of their earnings on consumer goods. That is to say, their aggregate propensity to consume will decline, which means a loss of employment for households dependent on that consumption.

What’s the up side? You mean, why would Missouri Gov. Eric Greitens and Missouri’s Republican legislature support legislation that hurt Missourians?

C’mon. Really? Look, I am begging all of you to look at http://www.opensecrets.org to take a peek at who is bankrolling Missouri’s bought and sold state legislature. These folks couldn’t care less about Missouri working families. For them, its all about out of state investors, padding the wallets and bank accounts of the already filthy rich.

Oh. And, here’s the punch line. When Missourians demand lower wages, employers will flock to Missouri.

Ok. Sorry. I’m from the highest wage, highest benefit region of the country. In order to attract investors, we raised wages and we raised taxes. High wage, high benefit employers are flocking to my neighborhood because they know that employees where I live are mad, mad, mad about consumption — they have so much disposable income.

In Missouri? In Missouri? You’re kidding, right? Workers make so little in Missouri that you would be foolish to build a business there. In the mean time, visit http://www.opensecrets.org. Your governor and your legislators are laughing on their way to the bank.

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