Missouri Employers Must Jazz Up wages to Avoid St. Louis Blues

Employers are struggling to fill jobs in Missouri and that’s a good thing. It means wages and benefits in the state will rise and workers will be better off. That is happening while the state is curtailing its extended pandemic-related jobless benefits and keeping the state minimum wage at $10.30 an hour. It turns out that neither is necessary to help workers. People will go back to work provided they can do better than if they just stayed at home.

Missouri’s unemployment rate is currently 4.2 percent, more than a point and a half below the national average of 5.8 percent. The state’s current average private sector hourly earnings are $26.77, up from $27.19 in April and $26.55 last year. The state stopped offering enhanced and extended unemployment payments this month and the proportion of all workers getting benefits through state programs has dropped 13.8 percent since mid-May. States that have kept expanded federal benefits through to July, by contrast, have seen only a 10 percent drop, The Wall Street Journal reported Monday.

Missouri companies that struggled to fill positions two months ago now have dozens of people turning up at job fairs. But to hire those workers and keep them on board, the companies are finding that they need to offer something better than what they previously offered.

The New York Times notes that employers that aren’t offering more are still struggling to fill positions. “We were hoping we would see prepandemic levels,” Courtney Boyle, general manager of Express, told the Times after an unsuccessful job fair. Many of the employers at the fair had raised wages by $1 an hour or more in recent months. But the workers often turn them down. Why? Because for many Missouri workers, even with the increases, the wages being offered still weren’t competitive.

“They’re offering $10, $12, $13,” Elodie Nohone, told the Times. Nohone was already doing better than that by earning $15 an hour as a visiting caregiver. She went to the job fair to see if she could do better still. When she didn’t get a better offer, she did the practical thing and went home. “There’s no point in being here,” she explained. Another worker highlighted in the Times story, Justin Johnson, was earning $14 an hour shoveling piles of oats and other animal feed. He quit the job when a bottling company offered him $16 an hour for less arduous work. The state’s current minimum wage is $10.30 an hour and is set to rise to $12 hour by 2023. But for many workers that’s increasingly irrelevant. They’re looking for jobs that pay considerably better than the minimum wage.

To sum up, Missouri has made staying at home and not working less lucrative. Workers have gone out to find jobs instead and have bid up the price of their services. Employers who struggled to fill positions earlier this year when people were staying home due to the pandemic are still struggling to fill those positions. This time, they’re finding that the wages they used to offer aren’t good enough and they’re in competition for the workers who are looking for jobs, which means the wages will likely go up higher.

Unemployment is low. Wages are rising. And it’s happening largely because regulations are getting out of the way and businesses are being forced to compete for workers.