Jul 14, 2017

St. Louis' minimum wage is decreasing by 22%

A minimum wage worker at a McDonalds in St. Louis (Jim Salter/AP)

Correction: An earlier version of this post mistakenly stated that the minimum wage is set to decline by 17%, rather than 22%.

Minimum wages are generally marching higher in states and cities across the U.S., but the wage floor in St. Louis is set to fall from $10 to $7.80 later this summer. That's after a Republican-controlled state legislature voted to make illegal a city-wide minimum wage law that went into effect 10 weeks ago.

The St. Louis Post-Dispatch chats with employers in the city, most of whom say they will cut the pay of workers they had raised just 10 weeks before. But some, even those who opposed the higher minimum initially, can't bring themselves to do it.

Why it's unusual: Few ideas poll better than raising the minimum wage, and the issue has had particular success in state and city legislatures and the voting booth in recent years. Watch to see if Missouri is the movement's high-water market.

Why it's so hard to cut pay: One reason that some employers may be reluctant to lower wages after such laws are repealed is that humans are what behavioral economists call loss averse — they hate losing something more than they love gaining it. We are so miffed by pay cuts that employers fear such a hit to morale would be more costly than it's worth.

We can see this effect when looking at wage growth during recessions, which never stops outright even as prices for other stuff like real estate or stocks fall. Some economists believe that this inability for employers to adjust to a downturn by lowering wages causes high rates of business failure and the unemployment rate to leap several percentage points.

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LATAM Airlines files for U.S. chapter 11 bankruptcy

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LATAM Airlines Group SA said in a statement early Tuesday the firm and its affiliates in in the United States, Chile, Peru, Colombia and Ecuador have filed for Chapter 11 bankruptcy protection in the U.S.

Why it matters: Latam is Latin America's largest airline and its shareholders include Delta Air Lines. CEO Roberto Alvo noted in the statement the coronavirus pandemic has had a huge impact on the airline industry.

Novavax starts human trials for coronavirus vaccine

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Novavax began clinical trials of a vaccine for the novel coronavirus in Australia on Tuesday, per a statement from the Maryland-based biotechnology firm.

The state of play: 131 volunteers in the Australian cities of Melbourne and Brisbane will undergo injections as part of the study, the company’s research chief Gregory Glenn said during a briefing, per Australian Associated Press.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 12:30 a.m. ET: 5,495,061 — Total deaths: 346,232 — Total recoveries — 2,231,738Map.
  2. U.S.: Total confirmed cases as of 12:30 a.m. ET: 1,662,302 — Total deaths: 98,220 — Total recoveries: 379,157 — Total tested: 14,604,942Map.
  3. World: Italy reports lowest number of new cases since February — Ireland reports no new coronavirus deaths on Monday for the first time since March 21 — WHO suspends trial of hydroxychloroquine over safety concerns.
  4. 2020: Trump threatens to move Republican convention from North Carolina — Joe Biden makes first public appearance in two months.
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: New York stock exchange to reopen its floor on Tuesday — White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Charities refocus their efforts to fill gaps left by government.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 2 hours ago - Politics & Policy