Starting Jan. 1, 2026, Missouri’s minimum wage will increase from $13.75 to $15.00 per hour, under a law passed as part of HB 567. This is a 9% increase in hourly earnings for minimum wage workers, a group significantly made up of college students. Many, however, raise concerns about the negative impacts this change may cause.
For many students across the state, whether working in food service, retail or on-campus jobs, that extra $1.25 per hour represents larger earnings, especially after Southeast Missouri State University’s student workers just recently received an increase from $10.50 to the state minimum.
Research from the U.S. Bureau of Labor Statistics in 2024 showed that workers under 25 made up about 20% of hourly paid workers, but accounted for 43% of those earning at or below the federal minimum wage threshold.
A recent analysis by The Hope Center for Student Basic Needs found that 59% of college students surveyed have experienced at least one form of basic needs insecurity. For students working between 15 and 30 hours per week, this increase can roughly translate to an additional $18-$37 per week, or around $700-$1,400 over the course of an academic year. This boost could help with pressing expenses, such as rent, groceries, tuition or gas.
Many economists have different theories on how a higher minimum wage might impact the broader economy, especially students.
For example, the “multiplier effect” suggests low-wage workers will have more spending power, which will not only help them afford essentials but also enable greater spending to benefit local businesses.
According to David Yaskewich, department chair of accounting, economics and finance, this is a frequent and leading theory in support of a minimum wage increase.
“As minimum wage workers spend more money, then whatever businesses they buy from would have higher income, and they would spend more money as well,” Yaskewich said.
On the opposing side, however, there are many arguments against increasing the minimum wage, despite the plan being set into motion. One of these arguments is the theory behind labor-market adjustment.
“A common concern of the minimum wage increase might be that employers have to pay more per hour,” Yaskewich said, “And it might be the case that employers then have to cut back on the number of hours they give hired employees.”
Evidence from older research on wage increases, such as this paper from 2017, found that while hourly wages rose, total hours worked dropped by roughly 6–7%, which decreased net monthly income for some low-wage workers.
There is also a common debate that an increased minimum wage contributes to an increase in inflation, specifically that employers pass higher labor costs onto consumers through higher prices.
However, some economists disagree, and some studies have shown that these effects are generally small and localized. A blog post written by Economist Josh Bivens for the Economic Policy Institute and the W.E. Upjohn Institute for Employment Research has found that modest minimum-wage increases only raise prices marginally. Many businesses absorb wage increases through productivity improvements, slower hiring, or reduced turnover, rather than significant price hikes
Yaskewich also made note that the jobs made accessible for college students do not typically meet the standards of providing “livable” compensation for the average American household.
“Some [minimum wage] jobs are perfectly acceptable as providing some supplemental income for college students, but not necessarily supportable for a family,” Yaskewich said.
While the wage increase may improve take-home pay for students, economists also emphasize that the minimum is not designed to be a “living wage”. It functions as a legal floor, intended to prevent extreme, unethical underpayment. According to living-wage calculations from groups like MIT, it is estimated that a single adult in Missouri generally needs well above $15.00 per hour to cover housing, food, transportation and healthcare without assistance.
This gap is one of many reasons students pursue higher education to begin with. Degree holders earn significantly higher wages on average. Still, many students rely on these jobs to support themselves while earning their degrees, so making changes to the state wage floor is directly relevant to their financial stability.
