Just what the effect would be in Ohio if the minimum wage were raised from the current $7.95 an hour to $10.10 hour is not easy to say.
President Barack Obama in his State of the Union speech on Jan. 28 announced he would issue an executive order that would increase the minimum wage for federal contract workers from $7.25 and hour to $10.10.
Obama and those who support raising the minimum wage argue it will lower employee turnover, increase morale and lead to higher productivity overall.
But those against it say it will cause business owners to take cost-saving measures, like cutting employee hours or the number of people they employ, and raise prices.
State Rep. Matt Lundy, a Democrat, believes that raising the minimum wage to $10.10 would be a good thing.
“It’s important for us to raise the minimum wage. Families have to have a livable wage,” Lundy said.
Someone who makes $10.10 an hour based on a 50-week year would take home $20,200 in annual income.
“You probably have to get it in the ballpark close to $10 an hour to have something that’s close to starting a livable wage. I still think it’s difficult to get by on $10 an hour, but it’s a starting point,” Lundy said.
Nieko, who didn’t want to use his last name, is in his 20s and works at a local chain drugstore. He said he makes $8.25 an hour at his current job. His fear is if the minimum wage were to go to $10.10 an hour in Ohio, businesses would simply raise prices to make up for the increase in wages.
“They’re just going to jack the prices up on everything after a few months,” Nieko said, as he smoked a cigarette outside his place of employment before leaving there to head off to classes at Lorain County Community College. Like so many, Nieko works at a low-wage job while attending college. His hope is that by earning a degree in psychology, he’ll land a job that pays him $60,000 a year.
Nieko, who lives with a family member, said he doesn’t fear he would lose his job if the minimum wage went to $10.10 an hour.
“I’d like to think I’m a pretty valuable asset,” Nieko said.
When asked if he can support himself on $8.25 an hour, Nieko was blunt.
“Hell, no,” he said. “I got my W-2 and I made, like, $15,000. What’s poverty?”
According to the Department of Health and Human Services, the poverty line for a single person for 2014 is set at $11,670.
So, what would happen if the minimum wage went to $10.10 in Ohio? The owner of the Corner Store at 35365 Center Ridge Road, who chose to be identified only by his first name, Ken, said he would cut employee hours.
“I guess it’s good for people, but it’s bad for me,” he said, as he sat behind the store’s front counter, surrounded by a display of scratch-off lottery tickets to his left and a wall of tobacco products behind him. Underneath the lottery ticket display was a cooler containing 22-ounce cans of beer.
Gary Minute has owned the Garden Village, 33911 Center Ridge Road, since 1978. Inside it’s cold. There are all sorts of gardening items, ranging from decorations to pots to soil. Sporting a graying beard on his face and a floppy skull cap on his head, and clad in insulated coveralls, Minute said the problem with raising the minimum wage to $10.10 an hour is that it could price teenagers out of the job market, because too many adults with families will be competing for them.
“I feel most of the minimum wage jobs were meant for kids who want to save up for a car or whatever. I know just in our instance, now that the minimum wage is as high as it is, we’ve gone with more older people and less kids. So the kids are not getting a chance to get out there and experience working and learning what it’s about, and I don’t think that’s a good thing,” Minute said.
Minute said he’d like to see the government establish a minimum wage that would be paid to youngsters who want to work, but knows that is unrealistic.
“It would probably be unconstitutional,” he said.
“I think there should be concessions if you’re in high school and you want to work,” Minute said.
Lundy believes if the minimum wage were to be increased to $10.10 an hour in Ohio, it would have to be done gradually.
“I don’t think you could jump right to $10 an hour, but I think if you did a step process that would be reasonable,” Lundy said. “It gives everybody a chance, businesses to adapt to a step up in what the increases would be.”
Ohio’s minimum wage will be increased just this year by 10 cents, from $7.85. That’s because voters in the state approved a constitutional amendment in 2006, which requires the minimum wage go up by the rate of inflation.
Keith Lake, vice president of government affairs for the Ohio Chamber of Commerce, told The Columbus Dispatch in a story about the minimum wage hike that there were concerns, especially for small business, that pay hikes are constitutionally mandated in the state.
“Given the overall still-recovering economy and the increasing health care costs uncertainty from Obamacare, mandated wage increases are simply one more concern many small businesses will have to work through,” Lake told The Columbus Dispatch.
Mike Gillis, a spokesman for the AFL-CIO, said in the same story the increase in the minimum wage was “a move in the right direction.”
“It’s certainly not enough to make it a livable wage, but still a move in the right direction for now,” Gillis told The Dispatch.