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Department of Agricultural, Environmental, and Development Economics


Would a $15 minimum wage work in Ohio?

May. 8, 2017

Watch the WCMH news story.

COLUMBUS (WCMH) — Ohio’s minimum wage is $8.15 an hour, but this year one Ohio Senator released a plan which includes raising it to $15 an hour. Senator Sherrod Brown’s 77-page plan aims to help American workers and grow the middle class.

So far more than a dozen cities and two states have passed laws eventually raising their minimum wage to $15 an hour, but would that work in Ohio? Supporters say it would help low-wage workers, opponents say it may cost those same workers their jobs.

“You build the economy from the middle class out,” Senator Sherrod Brown said, he believes his plan, entitled, “Working too hard for too little: A Plan for restoring the Value of Work in America,” will grow the middle class. “80-90 percent of the public has seen stagnant wages, and that doesn’t serve anyone” Brown added. Amongst a number of other goals, the plan includes hiking the minimum wage to $15 an hour. “The minimum wage is worth a third less than it was 30 years ago,” Senator Brown added, “I think Ohio would be more of a destination state when people see a better standard of living and a better workforce.”

But critics call the plan a job killer, “It’s just something that a lot of people say they can’t afford,” said Natalie Walston with the Ohio Restaurant Association. Representing all of Ohio’s restaurants she believes mandating restaurants pay cooks, hosts and dishwashers $15 an hour would hurt the industry, consumers would end up paying more and some would have to close up shop, “We’ve had restaurant owners flat out say if this happens, I don’t know what I’m going to do, I may have to close my doors, I can’t afford to do this,” Walston added.

Senator Brown calls that argument unfounded, “When everyone is paid a better minimum wage, your restaurants going to do better, your hardware store is going to do better,” Brown said. Brown points to Seattle, Washington. Seattle’s minimum wage ordinance went into effect on April 1, 2015. According to the office of Labor Standards depending on the industry and size of the business the minimum wage will slowly increase to $15 over the next 5 years. Across the entire state of Washington according to the Washington State Department of labor and industry there is an $11 minimum wage, with plans to increase to $13.50 by 2020.

After nearly three years of increases, what has it done to the economy? The numbers all seem to point to success, Washington State’s unemployment rate is the lowest it has been since 2007, according to the Bureau of Labor Statistics for March, 2017 it sits at 4.7%. In Seattle specifically, it is at a near-record low of 2.8%. The state also added 10,700 new jobs in March. While Restaurant Associations say some restaurants have included service fee’s to menu items to help cover costs, there have not been widespread reports of food cost increases.

But what works in Seattle, Washington, may not work in Columbus, Ohio.

Right now Ohio’s March Unemployment rate is 5.1%, Columbus, Ohio is 4%.

“If one wanted to raise the minimum wage, we would have to think about ways to mitigate negative effects,” said Dr. Mark Partridge is a professor of economics at The Ohio State University, “As you raise the minimum wage, more and more of the people you are trying to help are going to be laid off.” According to Dr. Partridge, a larger city can successfully handle and even thrive under a higher minimum wage, but rural areas would see higher unemployment and possibly higher food costs, “They are going to start laying off workers, hiring fewer workers,” Dr. Partridge said. As Ohio’s workforce includes a large portion of rural workers, he believes the wage hike may have larger consequences here, “The higher the minimum wage, the greater those costs.”

The current congress has not been supportive of Senator Brown’s plan, however, Brown says he remains optimistic of the trend across the country. In 2017 21 states increased their minimum wage to some degree, including Ohio.