$15-per-hour minimum wage considered in Ohio
Last week Policy Matters Ohio released a study stating that a rise in Ohio’s minimum wage would not negatively impact employers’ ability to pay their workers and still make a profit.
“If the projected offset were shared among all affected workers, then each would work 2.9 percent fewer hours, and still take home 11.6 percent more in earnings,” reads the study. “Because the low-wage labor market is characterized by inconsistent hours and frequent job changes, it is likely that any hours reductions that did occur would be widely shared across many workers, who would also get higher hourly earnings.”
Again under consideration from Ohio’s legislature is the change of the state’s minimum wage under House Bill 34, introduced by Ohio Rep. Brigid Kelly, of Cincinnati, last week and now before the Commerce and Labor Committee. Her proposal if passed would see the state minimum wage increase next year to $12 per hour and reach $15 per hour by 2023. It’s currently $8.55 in Ohio, as of the last increase Jan. 1 from $8.30.
“If you’re working full-time you shouldn’t have to decide between buying food for your kids and leaving your lights on this month,” said Kelly in a phone interview Tuesday. “But that’s a huge issue that many of our low-wage income earners face… If minimum wage kept up with inflation it would be more than $20 an hour–and a lot of people think that it’s mostly teenagers who work minimum wage jobs, but that’s not the case.”
But local business owners are wary about the proposal, saying if passed it wouldn’t just affect their youngest employees.
“I’d love to be able to pay all my people $20 an hour,” said Bryan Waller, owner of JaniSource, a janitorial equipment and services provider based in Marietta. “It’s a really nice idea, but how do we pay for it? I think ultimately that gets passed on to the consumer and makes online stores like Amazon and big box stores more attractive to the consumer. It would hurt the smaller suppliers trying to keep up with the bigger companies–of course, the Walmarts would support higher wages because it kills the little guys.”
He said the proposal may also leave behind those trying to build work skills and experience.
“I think it leaves out a lot of unskilled labor and underskilled people,” he said. “You have to start somewhere, but it’s already hard to get people to show up at $10 an hour and be dependable.”
Waller wasn’t the only local business owner to share concerns with how the proposed wage increase would affect how employers choose their employees.
“Right now we take pride in being a first-employer of high-school aged kids,” said Sylvi Caporale, co-owner of American Flags and Poles on Front Street. “But those kids aren’t then coming with the experience and possibly work ethic, that’s coached in your first job.”
Michael Shields, a researcher with Policy Matters Ohio, explained that the data shows most minimum wage earners in Ohio are adults who “outnumber teens more than four to one.”
“I think it would not be the best policy to create tiers where employers are specifically then motivated to hire teenagers versus people who are trying to feed their families,” said Shields Tuesday, when asked if there should instead be a threshold for how much an employer is supposed to pay an individual based upon their age and number of dependents.
Ohio’s median low-wage worker is 34 years old, his report explains. Many are working to support children, and some are the primary or sole breadwinners for their families.
“A $15-an-hour wage is generally consistent with the basic cost of living for Ohio,” he said, taking into account both the costs of housing and general food and living costs. “This is in keeping with calls across the country because wages for low-income earners just haven’t kept up with the base of growth employers have seen. Workers are contributing significant value to the employers but aren’t able to bargain for their share of that growth.”
The federal minimum wage is currently $7.25 an hour. Across the 50 states, Ohio ranks 27th in the minimum rate an employer can pay an employee.
Some states are already nearing the proposed rates in Ohio. Currently, Washington D.C. has the highest minimum wage at $14 per hour. The cost of living there is 92.4 percent higher than in Ohio, according to U.S. Census Bureau surveys.
Caporale said Tuesday that if the legislation passes both the state senate and house of representatives, the rise would also impact higher-paid employees.
“Say I have an employee that already makes $11 an hour, but next year that minimum wage rises to $12,” she explained. “I’d have to move that employee up proportionally, ethically. Character-wise we’ve already recognized their talent by paying them more. If this shift happens, we can’t punish them by essentially downgrading them to minimum wage.”
She said she believes some change of a minimum wage is coming to Ohio in the next few years, but added it would affect the business strategies of small businesses like hers and others on Front Street in Marietta.
“We’d definitely have to change our business plan and how we price items,” said Charlie Clay, owner of Dad’s Primitive Workbench. “Not that our employees don’t deserve it, but how do we stay competitive and keep the store open?”
Both Clay and Caporale said a higher minimum wage would affect how many staffers they could hire, noting that around the winter holidays the rate wouldn’t be an issue but in slower months like February, it would.
“Monday we had two sales, and there have been days without any sales,” said Caporale.
Kelly said now that the legislation is before the Labor and Commerce Committee, the next steps include:
• A sponsor hearing before the committee to explain the merits of the bill.
• Then, if the chairman of the committee and the speaker of the House agree, additional public hearings both in opposition and favor of the bill would take place.
“Then it would be up to the speaker to bring it to the floor,” she explained. “Then it would have to pass the house and go through the same process in the Senate all before the end of the year.”
By the numbers:
• The federal minimum wage is currently $7.25 an hour, while Ohio’s is $8.55 an hour in 2019.
• Across the 50 states, 29 states and Washington D.C. have a minimum wage above the federal standard, ranging from $8.25 to $14 per hour.
• Between Ohio and Washington D.C., which has the highest minimum wage, there is a 92.4 percent higher overall cost of living in Washington D.C., 13.2 percent higher price in groceries, 296.7 percent higher cost in housing, 3.8 percent higher cost in utilities and 54.6 percent higher cost in transportation.
States with minimum wages above the federal minimum:
• Washington D.C.: $14.
• California: $12.
• Massachusetts: $12.
• Washington: $12.
• Colorado: $11.10.
• New York: $11.10.
• Arizona: $11.
• Maine: $11.
• Oregon: $10.75.
• Rhode Island: $10.50.
• Connecticut: $10.10.
• Hawaii: $10.10.
• Maryland: $10.10.
• Alaska: $9.89.
• Minnesota: $9.86.
• Arkansas: $9.25.
• Michigan: $9.25.
• South Dakota: $9.10.
• Nebraska: $9.
• New Jersey: $8.85.
• Delaware: $8.75.
• Missouri: $8.60.
• West Virginia: $8.75.
• Ohio: $8.55.
• Montana: $8.50.
• Florida: $8.46.
• Illinois: $8.25.
• Nevada: $8.25.
• New Mexico: $7.50.
Source: U.S. Census Bureau, Labor Law Center.