The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
The minimum wage for Ohio’s larger employers increased on Monday from $10.10 to $10.45 an hour for non-tipped employees, the Ohio Department of Commerce announced Wednesday. Tipped employees of larger companies will see an increase from $5.05 an hour to $5.25.
The increases are the consequence of a constitutional amendment passed by Ohio voters in 2006 that ties minimum wages to the Consumer Price Index — the federal government’s index of inflation. It “increased by 3.7 % over the 12-month period from Sept. 1, 2022, to Aug. 31, 2023,” the Department of Commerce said in a statement.
It doesn’t seem likely, however, that the wage increase is adequate for low-income Ohioans.
For starters, it doesn’t apply to employees of companies with less than $385,000 in annual gross receipts. Those employees will continue to be guaranteed the $7.25 federal hourly wage.
In addition, the increase to $10.45 an hour is less than half the $21.52 median hourly pay in Ohio, according to the Department of Job and Family Services.
Assuming an employee getting the new wage is fortunate enough to work full time and receive paid vacation, the $21,736 that person would earn each year would be well below the federal poverty standard for a family of three — $24,869.
In other words, while the increase might be welcomed by minimum-wage earners, it won’t do much to slow increasing income inequality in Ohio. The richest 1% of Ohioans in 2018 received 10% of the income in the state — almost as much as the entire bottom half, who received 13%.
It didn’t have to be this way, Michael Shields, an economist with Policy Matters Ohio, said in a statement.
“If Congress had placed a similar inflation safeguard (to Ohio’s) when it passed the highest minimum wage on record, way back in 1968, the federal minimum wage would be worth over $14 per hour today,” he said. “Without it, the wage has been cut in half, and minimum-wage workers take home half the pay their grandparents did two generations ago.”
Poverty and inequality costs Ohioans who make more than the minimum wage in several ways, including because so they pay for programs such as Medicaid, which serves almost a third of Ohioans.
Large numbers of Ohioans also lack the most basic necessities.
The U.S. Census Bureau’s Household Pulse Survey in October estimated that 357,000 Ohioans often or sometimes didn’t have all the food they need.
It also estimated that members of 62,000 households who rent thought it was very or somewhat likely they would be evicted in the next two months. That’s 27% of the total number of households encompassed by the estimate.
There’s public support for raising the minimum wage to $15 an hour, but the Ohio Chamber of Commerce is adamantly opposed. So much so that it joined pro-gun, anti-abortion and pro-gerrymandering groups in August in pushing a measure that would have made it much more difficult for citizens to change the state Constitution.
Those groups formed a distinct minority, though. The measure failed by 14 percentage points.
