States Moving To Bar Cities From Establishing Own Minimum Wages

Date: September 29, 2015

Alabama, Missouri Among States Vying To Minimize Cities’ Powers On Wage Issues

As the public debate over raising the minimum wage spreads across the US, cities such as Los Angeles, St. Louis, and Birmingham, AL have been implementing their own citywide minimum wages, arguing that state and federal wages are too low for urban workers. However, some states are fighting back against local efforts to raise wages above the state level. In an overview of recent developments, the Wall Street Journal noted examples from Alabama, Missouri, Montana, Michigan, and Rhode Island where state and local governments are clashing over wage hikes. Alabama state Rep. David Faulkner has introduced a measure in the state to bar cities from setting minimum ages. He explained, “It is not an us versus them scenario. It is a state issue. I don’t believe anyone anticipated cities would start introducing their own minimum wages.” The Missouri cities of St. Louis and Kansas City have both recently passed local minimum wage measures, and a recent report commissioned by Gov. Jay Nixon (D-MO) on how to effectively “respond to the root causes of racial unrest in the St. Louis suburb of Ferguson” suggested a minimum wage increase. Last week, state legislators implemented “legislation that prohibits St. Louis, Kansas City and other communities from setting minimum wages” after successfully overriding the governor’s veto. A similar effort by Montana lawmakers was vetoed by Gov. Steve Bullock (D-MT) earlier this year. However, like Missouri, Michigan and Rhode Island have also recently passed laws barring cities from setting independent minimum wages.

What Happens Next

It’s unclear whether or not Rep. Faulkner’s legislation will be successful in Alabama, or if a previously-passed St. Louis minimum wage will be reversed pending a lawsuit by the business community. However, the Journal noted that Kansas City’s minimum wage is likely “dead following the override by the legislature.” With debate over minimum wages continuing, it’s likely more state vs. local battles will occur in the legislature and the courts.

What This Means For Small Businesses

US small business owners are increasingly under attack on wages. The Journal quoted NFIB spokesman Jack Mozloom as saying, “The big blue cities have been very aggressive in pushing the minimum wage.” Higher wages are bad for the bottom lines of small businesses, and could lead to hiring freezes, cuts in worker hours, or layoffs.

Additional Reading

NFIB recently noted the negative effects of minimum wage increases in cities including Los Angeles, San Francisco, and Seattle.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

Related Content: Small Business News | Minimum Wage

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