Missouri’s Minimum Wage Projected to Increase by 6.1 Percent on Jan. 1, 2009

 Missouri’s Minimum Wage Projected to Increase by 6.1 Percent on Jan. 1, 2009

Hourly Wage to Increase from $6.65 to $7.05 per Hour

JEFFERSON CITY, MO – Missouri’s Minimum Wage Law, adopted by Missourians in 2007, requires the Missouri Department of Labor and Industrial Relations (DOLIR) Director to, on Sept. 30 of each year, make any required adjustments to the minimum wage earnings based on changes in the Consumer Price Index (CPI). This requires measuring the increase or decrease in the cost of living percentage increase or decrease as of the preceding July over the level as of July of the immediate preceding year of the CPI for Urban Wage Earners and Clerical Workers (CPI-W) as published by the U.S. Department of Labor (USDOL) with the amount of the minimum wage increase or decrease rounded to the nearest 5 cents. The next increase in Missouri’s minimum wage rate will become effective on Jan. 1, 2009. That new rate has been projected to be $7.05 per hour. For tipped employees, the new rate will be a minimum of $3.525 per hour.

“The Department has begun receiving calls from businesses asking what the new rate will be so they can take that into account as they begin working on their budgets for next year,” said Todd Smith, DOLIR Director. “While we are not required to publish the information until the end of September, it is doubtful the federal government will revise their CPI numbers and we wanted to give employers as much lead time as possible,” Smith added.

The U.S. Bureau of Labor Statistics has posted preliminary figures for the month-ending July 2008, therefore enabling the Director to project the effect of the Missouri minimum wage rate for Jan. 1, 2009. This projection may be subject to change and will not become official until Sept. 30, 2008. The CPI for Urban Wage Earners and Clerical Workers in the Midwest Region for July 2008 currently is published at 206.038. The CPI for July 2007 was 194.219. This represents an increase in the CPI of 11.189 or 6.1percent. This calculation and how it is applied to Missouri’s minimum wage rate is shown at the end of the press release.

The current minimum wage rate mandated by the USDOL (the federal minimum wage rate) is $6.55. Since Missouri’s current minimum wage rate and the projected rate for Jan. 1, 2009, are both higher than the $6.55, Missouri’s Minimum Wage Rate is the prevailing rate that Missouri employers are required to pay. The federal minimum wage rate will again increase on July 24, 2009, to $7.25 per hour. If the above projected rate of $7.05 for Missouri becomes final, the federal rate will exceed Missouri’s rate, and that will become the minimum wage rate that Missouri employers are required to pay.
Calculation of % increase between 2007 and 2008

CPI for July, 2008 *
206.038
Less CPI for July, 2007 *
194.219
Equals index point change
11.819
Divided by previous period CPI
194.219
Equals
0.061
Result multiplied by 100
0.061 X 100
Equals percent change
6.1%
Current Missouri minimum wage rate
$6.65
Multiplied by CPI percent change
$6.65 X 6.1%
Equals
$0.405
Result rounded to the nearest five cents
$0.40
Added to Missouri minimum wage rate
$6.65 + 0.40
New Missouri minimum wage rate **
$7.05

* The CPI information is published by the U.S. Bureau of Labor Statistics and can be accessed at: http://data.bls.gov/cgi-bin/surveymost?cw (Select “ Midwest Region All Items, 1982-84=100 – CWUR0200SA0” and click “Retrieve Data”)

** The new Missouri Minimum Wage Rate will be calculated again on Sept. 30, 2008, and will become final at that time. This new rate will not become effective until Jan. 1, 2009.

For more information about Missouri’s Minimum Wage Statutes, visit the Internet site http://www.dolir.mo.gov/ls/statutes/statutes.htm.