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Tuesday, September 30, 2014
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Published: Wednesday, 1/1/2014

EDITORIAL

Worthy of their hire

A higher minimum wage would help low-paid workers and boost the economy without leading to job losses

Protesters rally for better wages at a fast-food restaurant in Detroit last month. Protesters rally for better wages at a fast-food restaurant in Detroit last month.
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This new year will be marginally happier for about 330,000 Ohio workers — nearly 7 percent of the state’s work force — who earn the statewide minimum wage or are paid slightly more. That wage rises by a dime today, to $7.95 an hour. An Ohioan who works full-time for the minimum wage earns roughly $16,500 a year — not much to support oneself, much less a family.

Still, Ohio’s lowest-paid workers are somewhat better off than employees elsewhere who continue to toil at the federal minimum wage of $7.25 an hour. If that wage had merely risen with the cost of living over the past four decades, it would be — and should be — about $10.55 an hour today.

One of the many things Congress left undone in 2013, and must do this year, is increase the minimum wage. A bill before Congress, which President Obama supports, would raise the wage to $10.10 an hour by 2015, then adjust it each year to keep pace with inflation.

Opponents of a higher minimum wage assert that it would depress job growth, and especially would discourage employers from hiring unskilled and young workers. Two decades’ worth of real economic research — not political slogans — argue to the contrary.

A new review of these data by the nonpartisan Center for Economic and Policy Research, cited by the liberal advocacy group Policy Matters Ohio, finds “little or no evidence” of job loss when minimum wages have increased. That’s true even in labor markets with high jobless rates.

Companies that pay their workers better endure less turnover and enjoy higher productivity, the research concludes. Four out of five professional economists agree that the benefits of a higher minimum wage outweigh the costs, according to a survey conducted last year by the University of Chicago’s business school.

A separate nationwide survey last year of small-business owners — who supposedly would be harmed most by having to pay a higher minimum wage — found that two-thirds of them not only would support it, they also favor indexing the wage to inflation. A higher wage, they agreed, would boost consumer demand.

Passage of the proposed minimum-wage increase would affect more than 30 million workers. Seven out of eight of them are over the age of 20. More than half are women; nearly half are racial minorities. An estimated 43 percent have attended college. They are parents of 17 million children.

The benefits of a higher minimum wage are not limited to those who earn it, and will spend it almost immediately in their communities. The Washington-based Economic Policy Institute estimates that Ohio’s wage increase will boost the state’s gross domestic product by $39 million this year.

That’s a powerful jolt to business expansion and economic activity. The National Employment Law Project calculates that the minimum wage increase will support creation of 300 full-time jobs in Ohio this year. Advocates claim that a higher federal minimum wage would lead to as many as 140,000 jobs.

At the same time, the minimum wage for Ohio workers who receive tips — most of them restaurant employees — rises today by a nickel an hour, to $3.98. That’s considerably better than the federal minimum wage for tipped workers of $2.13 an hour, which has not risen since 1991.

Again, though, such employees — nearly three-fourths of them women — would benefit more if Congress approved the measure before them, which would peg the tipped minimum wage at 70 percent of the full federal minimum wage. That won’t bust the budgets of restaurants or their customers.

Three out of five jobs created since the Great Recession began are in low-wage occupations, such as cashier and food service worker. The Ohioans and others who hold these jobs, no less than any other workers, deserve a modicum of economic security and dignity — for themselves and their families.

That includes a modest, reasonable increase this year in the federal minimum wage. Workers will benefit, and so will the nation’s consumer economy.



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