Three Ohio Democratic lawmakers are seeking support from the General Assembly to raise the state’s minimum wage to $15 per hour over the next six years. While they say the move will boost the long-term health of the state’s economy, critics counter it will cost jobs.
The plan, created by Rep. Brigid Kelly, D-Cincinnati, and Sens. Cecil Thomas, D-Cincinnati, and Hearcel Craig, D-Columbus, would increase the state’s wage to $10 per hour Jan. 1, 2022, and $1 per hour each year until it reaches $15 in 2027. Beyond that, the state’s minimum wage would be tied to inflation. Ohio’s current minimum wage is $9 per hour.
The lawmakers say a 2019 Policy Matters Ohio report that showed increasing the minimum wage to $15 would increase wages for around 2 million Ohioans, and the average worker would make more than an additional $4,000 annually.
In contrast, U.S Treasury Secretary Janet Yellen testified before the U.S. Senate that raising the federal minimum wage from $7.25 to $15 per hour would have “very minimal” impact on overall employment.
A report from the American Enterprise Institute (AEI) says, “Historical data does not definitely reveal how businesses will react to an increase in the minimum wage. Some studies find that an increase in minimum wage increases the hourly wage of those working, but it tends to cut the overall pay of covered workers through diminished hours and a reduction in employees. There is little doubt that raising the minimum wage increases the cost of labor and creates incentives to adopt technologies that replace human workers with machines or labor extracted from customers.”
One example is the increasing number of self-checkout areas at stores across the country as an example of how businesses are countering higher labor costs.
AEI calculated Ohio’s higher minimum wage impact at 1.32, with an average across the country at 1. In the analysis, only Louisiana at 1.56 and Arkansas at 1.38 were higher than Ohio’s in terms of adjustment costs relating to a wage hike.