More than five years ago, a study commissioned by the state found Missouri ranked last among the 50 states in average employee pay. It also found base salary pay was 10.4% below salary range midpoints and total cash compensation was 12.6% below the market.
After a pandemic recession, increased competition with the private sector, a focus on retention of skilled employees and an economy rebounding with inflation, Republican Gov. Mike Parson announced on Monday salary increases and a $15-per-hour minimum base pay was necessary. He said the increases are feasible without a tax increase or cutting program budgets.
“It’s long overdue to take care of 50,000 state employees,” Parson said Tuesday after an event in St. Louis County. “A lot of them have been on the front lines now for 20 months, like many others. “
Parson will recommend a 5.5% cost of living adjustment (COLA) and a $15 per hour base pay for all state employees. The proposal will cost $91 million, including $52 million in general revenue. Missouri’s 2016 Compensation and Benefits Report, conducted by CBIZ Human Capital Services, estimated adjusting the compensation to the threshold of market competitiveness would cost approximately $13 million for 5,050 state employees being paid below pay-range minimums.
In addition to state government employment being more competitive with the private sector, Parson said state employees in critical positions need to be better compensated. The proposed increases must be approved by the legislature.
“You’re looking at state employees that have to make decisions every day – whether that’s in foster care, social services or prison guards – and we’re paying some of these people, $26,000 to $27,000 a year,” Parson said. “And they’re making decisions (regarding) a kid staying in their home? Major decisions are being made. We just need to do a better job of that.”
Democrat legislators previously pushed for increases.
“I fight this every single year in the budget,” state Rep. Peter Merideth, D-St. Louis and the ranking minority on the House Budget Committee, told The Center Square during an interview in September. “MODOT comes in and says they are severely understaffed because we pay to train people. We help employees get their CDL (commercial driver license) and they promptly quit a month later to work for UPS (United Parcel Service) across the street for $8 more an hour.
“By paying people better wages, we will save the state money every single year. But the Republican legislature and the governor has rejected that every single year.”
Missouri’s minimum wage will increase to $11.15 per hour on Jan. 1, 2022, according to state law. In 2018, Missouri voters approved Proposition B, increasing the minimum wage 85 cents per hour each year through 2023. All private businesses are required to pay the minimum wage rate with the exception of retail and service businesses whose gross annual sales are less than $500,000. Missouri’s minimum wage law doesn’t apply to public employers and prohibits it from being lower than the federal minimum wage.
“I’m not a big fan of the minimum wage, but I think what you’re seeing is just supply and demand taking care of itself,” Parson said. “I think wherever you go right now, you’re going to find people out there searching for good-paying jobs. To get people back in the workforce… there’s just such a shortage.”
The $15 per hour base wage reflects current economic conditions, Gov. Parson said.
“Whether it’s convenience stores, fast food or just name one of those entry-level (jobs), about everybody is at $15 an hour,” Parson said. “So, one, we wanted to get to a base for state employees coming in. Two, how do we compete? How do we compete when people, some who’ve been with us 5 to 10 years… how do we keep them in the state workforce?”
While Parson’s proposal has support, not everyone is on board.
State Sen. Bill Eigel, R-St. Charles, said Parson’s move wasn’t expected.
“Lots of small-government Republicans that voted for the GOP last year probably didn’t see this policy move coming,” Eigel posted on social media. “Of course, they didn’t see the gas tax increase coming either.”
Budget leaders in the House and Senate support the wage increase.
“I recognize the urgency and support an early supplemental,” House Budget Chair Cody Smith, R-Carthage, said in Monday’s statement. “This will ensure that the state is able to retain talented employees who will continue providing essential services to the citizens of our state.”
State employees will receive a 2% COLA increase on Jan. 1, 2022.
“Despite regular pay increases, Missouri’s state employees continue to rank among the lowest paid in the country,” Senate Appropriations Chair Dan Hegeman, R-Cosby, said in Monday’s statement. “This pay plan proposal will raise the minimum base pay, reduce pay compression, and ensure Missouri is able to recruit and retain talented and dedicated public servants.”
This article was originally posted on Parson says pay increases overdue for state workers