The minimum wage for most hourly workers in Ohio is getting a 15-cent bump this year to $8.30 an hour, more than a dollar higher than the federal minimum wage.
The increase is a consequence of a state constitutional amendment voters approved in 2006 that tied the base wage in Ohio to the consumer price index.
Non-tipped employees will get $8.30 an hour, unless they work for small employers who bring in gross annual receipts less than $305,000, according to the Ohio Department of Commerce. In that case, employees should be paid no less than the current federal minimum of $7.25.
Tipped employees should get no less than $4.15 an hour in addition to tips.
Dan Young, owner of Young’s Dairy in Clark County near Yellow Springs, said longtime Ohio business owners simply budget for the expected increase by now.
“It’s something we sort of anticipate and budget,” he said. “The gradual increases are not that a big of a deal by now. It’s something we put into our plans.”
Businesses absorb the increase in a number of ways. Young she he tries to cut expenses, raise menu prices slightly and simply tries to make employee hours more productive. He also reconsiders investments in equipment or materials when necessary.
He estimates that he pays a total of about 200,000 employee hours a year. His peak seasons are summer and fall, when he has more than 300 employees, including tractor drivers, cooks, ice cream makers, ice cream dippers and many others.
Said Young, “It takes a lot of employees to run this thing.”
He said he has never had to lay employees off due to minimum wage hikes, although he has had to cut hours.
About 146,000 Ohio workers will get a small raise as a result of the scheduled adjustment, researcher Michael Shields said in a paper for the liberal-leaning Ohio think tank, Policy Matters Ohio.
But the raise will have a ripple effect, nudging up wages for another 478,000 workers as employers adjust to maintain pay scales, Shields wrote.
Thanks to the gradual effect of inflation, though, there’s less to this year’s raise than meets the eye, he added.
“The federal minimum wage has fallen by a quarter since 1968 when it was worth about $10 in today’s dollars — $9.68 in 2016, $10.08 in 2017,” Shields said in a release. “Despite the inflation-adjustment since 2006, our state’s low wage workers are working for less than their counterparts did a half century ago.”
Shields said the higher wage still leaves a full-time worker about $3,000 short of the poverty line for a family of three, and policymakers should gradually increase the wage to $15 an hour.
In 2016, the Ohio General Assembly passed a law prohibiting cities from setting minimum wages. That law is being challenged in court.
Chris Kershner, executive vice president for the Dayton Area Chamber of Commerce, said a relatively strong economy means most businesses in the Dayton area should be able to weather the increase.
But there is a long-term cost to many employers, he added.
“It does erode at the resources that Dayton-area companies have access to,” Kershner said. “And depending on the total impact of the increase, it could restrict future hiring, capital investments and business expansion.”
In the coming year, the chamber will be focused on other costs of doing business, including “right-to-work” laws, he said. Such laws let workers opt out of paying required dues to a union as a condition of employment.
Businesses argue that right-to-work laws give employers more leeway to hire and operate, while unions argue that such laws betray an anti-union bias and harm working conditions.
Said Kershner: “Twenty-eight states are now right-to-work, including four of the five states that border Ohio. Even the headquarters for big labor, Michigan, realized the economic benefit to being a right-to-work state.”
“We are not saying that labor unions are wrong or should go away,” he added. “We just think that employees should have a choice in the workplace and should not be forced to join a union.”