Ohio’s minimum wage increasing on New Year’s Day

Bloomberg photo by Daniel Acker

Ohio’s minimum wage increases Wednesday to $8.70 an hour for non-tipped employees and $4.35 an hour for tipped employees.

The new minimum will apply to employees of businesses with annual gross receipts of more than $319,000 per year.

The increase is mandated by a state constitutional amendment, approved by voters in 2006, which adjusts the state minimum wage based on the previous year’s inflation rate.

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The change will benefit 84,000 of Ohio’s lowest paid working people, two-thirds of whom are adults, according to progressive policy group Ohio Policy Matters.

Nationwide, minimum wages will go up in 22 states in the new year, increasing pay for 6.8 million workers across the country, according to the Economic Policy Institute.

Ohio is among seven states where minimum wage earners will see their pay grow because of automatic annual inflation adjustments, the institute said.

Businesses have often said that increases in minimum wages could lead to layoffs or increase the cost of their products and services.

Supporters of increasing minimum wages, such as Policy Matters Ohio, have said the raises lead to economic growth, via increased consumer spending.

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Ohio Policy Matters said the voter-approved change in 2006 — tying adjustments in the wage to inflation — safeguards the state’s poorest workers against further losses in the minimum wage due to inflation.

“But the 2006 raise was not high enough to recover ground already lost in the decades before that change,” Michael Shields, a researcher with Ohio Policy Matters, said in a news release.

“The minimum wage in Ohio and nationally peaked in 1968 at just over $14 an hour in today’s dollars,” he said.

Lawmakers in six states — California, Illinois, Maryland, Massachusetts, New Jersey, and New York— have enacted legislation that will eventually bring their state minimum wages to $15 an hour, the Economic Policy Institute said.

For 2020, minimum wages in these states will range between $11 and $13.

Amid a tight labor market, major chains have boosted their minimum hourly rates. Walmart increased its minimum hourly pay to $9 an hour in 2015 and has since raised it to $11.

Target increased its minimum hourly pay to $13 an hour in June, and plans to increase it to $15 by next year.

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