Small business owners preparing for minimum wage hike

FERGUSON, Mo. – Missourians approved Proposition A on Tuesday, raising the state’s minimum wage to $15 an hour by 2026 and giving most full-time workers paid sick leave every year. Some small business owners are already bracing for the wage hike.

Cathy's Kitchen, Cathy Jenkins’ family-owned business, has been open for 11 years in Ferguson. Her business was affected by the Ferguson unrest, when her front windows were shattered, and business slowed down.

“Once all the lights and cameras were gone, nobody wanted to come to Ferguson, and they thought it was scary; not safe. So, our business dwindled to nothing,” Jenkins said. “We could barely keep our doors open. The celebrities started coming out of nowhere.”

Her business survived but then came the pandemic.

“When COVID hit, no one was ready for that…you had no idea what to do,” Jenkins said.

Jenkins weathered these setbacks, rebounded, and has now expanded to a second location.

Jenkins began bracing for Proposition A to pass a few years ago by cutting staff in half and paying employees $15 an hour to be competitive. She purchased a robot waiter (“Plato”) to help deliver food. She also went cashless and switched to kiosk machines to keep costs down.

“It was tough doing it, but we realized since we could not get people to come in, we went from nine employees and now we are down to four, and that's what you have to do to subsidize that,” she said.

Proposition A will take a gradual approach to wage increases, with the minimum wage first rising to $13.75 per hour on Jan. 1, 2025, and then to $15 per hour in 2026. The wage will increase annually based on changes in the Consumer Price Index.

Jenkins said for small businesses like hers, that means a lot of money.

Missouri voters previously rejected a minimum wage increase in 1996. Prior to Tuesday, voters in 26 states had approved minimum wage increases over the last 28 years.

Government entities, including school districts and other public institutions, will be exempt from both the minimum wage increase and the sick leave requirements.