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    MIDWEST UPDATE

    In Ohio, a change in the minimum wage may be mandated by a proposed constitutional amendment, while in Missouri, the strategy of choice by those calling for a steep rise in cigarette taxes is a petition that would put the initiative on the November ballot. In Iowa, petroleum retailers are chafing under the sudden increase in the price of ethanol, while in South Dakota, the meth menace generates stringent new regulations that pose difficulties for both retailers and consumers. Where have we heard that before?

    Sometimes, what sounds like a good idea turns out to be a bad one, which may be the case in Ohio. There, signatures are being gathered to put a constitutional amendment on the ballot in November 2006 that would raise the minimum wage from $5.15 to $6.85 an hour starting January 2007, with annual increases keyed to the Consumer Price Index as of January 2008. It also requires tipped employees to be paid 50 percent of the minimum wage, and keeps the $5.15 minimum wage in place only for employees under 16, and for those working for a company whose gross revenues are under $250,000 a year.

    "Dangerous," is how Lora Miller, executive director of the Ohio Association of Convenience Stores (OACS) characterizes the amendment. "It will hurt small businesses in particular by mandating annual wage increases regardless of the economic conditions of the day. The result will be higher prices for everyone," she claims, "but it will be especially difficult for seniors and others living on fixed or limited incomes."

    For proof, Miller cites a March 2006 study published by the Employment Policies Institute, titled The Effects of the Proposed Ohio Minimum Wage Increase, by David A. MacPherson of the Pepper Institute on Aging and Public Policy at Florida State University. It projects a loss of nearly 12,000 jobs if the increase is approved.

    The biggest losers of mandated minimum wage increases, according to a 2005 EPI report, are lower skilled workers who get priced out of the labor market, and those who will lose more in government benefits such as Medicaid than they will gain in wage increases.

    "The worst part is that the proposal would actually hurt those it's designed to help," Miller points out, "which are low-wage workers in low-income families. It's just a bad idea all around."


    Back in 2002, the Missouri Petroleum marketers and Convenience Store Association (MPCA) was instrumental in defeating Proposition A, which would have boosted cigarette taxes 324 percent, and increased the tobacco tax 200 percent. And they did it with an expenditure of just $41,000, compared to $5.5 million spent by proponents of the tax increases.

    "Even more impressive," says Ron Leone, MPCA executive director, "was the fact that only 26 percent of the population at the time used tobacco products. So everyone must have known how outrageous the proposal was and voted against it."

    Now it's 2006, and the camel has its nose in the tent once more, (not that Camel), in the form of a proposition that may be placed on the ballot by a people's petition, which is permitted in Missouri, if enough signatures are garnered. This time a 470 percent tax increase on cigarettes is called for, along with a 200 percent on tobacco products.

    "We're going to fight this as vigorously as we did Prop A," vows Leone. "Our campaign will feature a highly visible voter education program based in convenience stores, just as our campaign in 2002 did, and we have the Governor and Attorney General behind us. If the program goes through it will generate a half-billion dollars a year in new welfare programs, which will fatten the wallets of greedy doctors, hospitals, HMOs and drug companies, and the public is sure to see through it."

    "It's beyond ironic," says Dawn Carlson, president of the Petroleum Marketers and Convenience Store Association of Iowa (PMCI). "Iowa practically pioneered the sale of ethanol-blended gasoline in the US, and now that it's become popular by law, the price is shooting sky high and the ethanol manufacturers are shipping it out of Iowa to everyone else.

    "The result," notes Carlson, "is that the retail price of E10, which used to be voluntarily marketed at 10 cents a gallon less than regular unleaded, is now the same or higher priced at the pump, even though average wholesale cost for E10 is nearly 10 cents more per gallon.

    "Retailers have absorbed the increased cost of ethanol long enough," she adds, "and have reluctantly adjusted their marketing strategies. Some report they'll have to change their street sign product slate."

    Carlson doesn't pretend to know what the future holds but she finds the steep price rise of ethanol difficult to adjust to. "After all," she says, "we voluntarily pushed the use of ethanol long before everyone else did, and we've worked with these groups to encourage the use of their product; now we're faced with the challenge of being able to afford it."


    Meanwhile, in South Dakota, the meth menace has generated a new set of laws in an attempt to control it. As of July 1, any business in the Mount Rushmore State that sells medicines containing pseudoephedrine or ephedrine must, a) verify the identification of each person buying these products, b) keep a log of every purchase, and c) as of August 1, send those logs to the Attorney General's office every month.

    There's also a two package limit on each sale, limited to a total of 3.6 grams of pseudoephedrine per person, and 9 grams per 30 day period.

    Want more? The products must be in a locked case, or on display behind the counter, never on open shelves.

    "These laws," observes Shawn Lyons, executive director of the South Dakota Retailers Association (SDRA), "may force some retailers in our state to stop carrying those products. If this happens, customers who get sick and live in distant rural areas will suffer because there aren't many retail stores available to them to choose from.

    "Retailers are very concerned about the war on meth," notes Lyons. "We are also in the business of providing good customer service to law abiding citizens, so we have to find a balance between assisting law enforcement's efforts, while serving the health needs of our customers. If the new laws turn out to do more harm than good, then we hope the state legislature will take another look at them."

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