St. Louis’ minimum wage is soon to drop to $7.70, but who benefited from the short-lived increase to $10 an hour?
Economist Charles Gascon and senior research associate Daniel Eubanks from the Federal Reserve Bank of St. Louis looked into the issue. Their findings were released Thursday.
Gascon and Eubanks suggest policymakers differentiate between city residents and city workers. Among 32,500 city residents who earn less than $10 an hour, only 19,900 were affected by the raise. Because the majority of city workers commute from outside the city, about 23,000 non-residents also benefited.
Another crucial distinction is between low-wage workers and low-income households.
“More than half of those living in poverty have no one in their household who is employed. Moreover, many minimum wage workers are often young workers taking their first job,” Gascon and Eubanks wrote. “So, low wages may not be associated with low household income.”
St. Louis’ minimum wage ordinance went into effect in May, raising the wage floor to $10 an hour within the city limits. Missouri’s statewide minimum is $7.70 an hour, and a state law pre-empting local minimum wages takes effect Aug. 28.
Read more: St. Louis Post-Dispatch