Is a higher minimum wage good for Ohio? Experts cite trade-off for workers, employers

Tyrel Linkhorn

GRAPHIC BY TRENT PHEIFER | DAILY KENT STATER

Credit: Steve Schirra

A recent CBS News/New York Times poll put support for Ohio Issue 2, the proposed amendment to raise the state minimum wage from $5.15 to $6.85, at more than 75 percent, but Kathryn Wilson, associate professor of economics, warned the issue is not “cut and dry.”

“Traditional economic theory states a trade-off to raising minimum wage,” she said.

Many factors must be looked at, including the buying power of the wage and the possible effect on employers.

Wilson said the buying power of the current minimum wage is low, a claim that is backed up by a June study by the Center on Budget and Policy Priorities.

According to the study, the relative value of the federal minimum wage, which is the same as Ohio’s minimum, is the lowest since 1955.

Wilson said it is often argued that small businesses are harmed by wage increases, but some recent studies have said they might actually benefit by having a lower turn over of employees and saving money on hiring and training new employees.

Anita Herrington, director of Portage County Job and Family Services, also said there is a trade-off associated with minimum wage increases.

“In a large economic system, when you tweak one thing, it impacts everything,” she said. “Morally, we have too many people under-employed (not self-sustaining) or over-employed (working two to three minimum wage jobs),” she said.

But Herrington expressed concern that the proposed increase could have an effect on federal income brackets, putting some Portage County workers out of federal assistance programs.

“If they changed federal guidelines for income brackets (along with the minimum wage), I wouldn’t have any problem with it,” she said.

Another argument of opponents of the amendment is that a minimum wage increase could increase the price of goods.

Wilson said while possible, it is unlikely prices would increase enough to “eat up all the raise for that group.”

“It’s not something people would notice,” she said.

James Siedler, junior business management major, saw the proposed increase good all around.

“It would help those people making minimum wage, put more money in the economy, generate more money for taxes,” he said. “With inflation and the cost of goods going up, so is the need for money.”

Siedler said while he personally makes considerably more than minimum wage, he could see it helping college students.

“Just starting out, $5.15 doesn’t cut it,” he said.

Wilson also sees the amendment as good overall.

“Personally, I think it would be a very good thing to see it passed,” she said.

Ami Hollis, Career Services associate director, said the effect of the possible minimum wage increase for student employees is being looked at by Career Services, but said she was unable to give any specifics at the current time.

Contact student finance reporter Tyrel Linkhorn at [email protected]