When Ohio voters overwhelmingly approved a minimum wage increase last month, they unintentionally put colleges in a bind.
Because the increase from $5.15 to $6.85 per hour goes into effect in January between semesters and in the middle of the fiscal year some universities are scrambling to find additional money to pay student employees, planning to reduce student work hours, or both.
It means we need to find $180,000 for just this school year, said Eric Fulcomer, vice president of enrollment, management, and student life at Bluffton University in Allen County.
Other universities face similar situations. About 1,200 students at the University of Toledo would be eligible for raises, meaning the university might have to eliminate 145,000 hours of student work or find an additional $1 million in its budget, said Jim Sciarini, UT s associate vice president of human resources.
Teri Sharp, a spokesman for Bowling Green State University, said the university will pay 2,800 student employees higher wages as required, but it may not replace graduating student workers in order to contain costs.
Proposed legislation has been introduced in the Ohio House to exempt public universities from the minimum-wage increase. Private colleges, such as Mennonite-affiliated Bluffton, still would have to pay the increase under the proposed legislation.
The Association of Independent Colleges and Universities of Ohio will monitor the legislation s progress, said Stacey Dorr, a spokesman for the Columbus-based consortium.
Covering the cost
Some universities believe they can absorb the additional cost.
Ohio State University, the state s largest university, likely will account for inflation-driven minimum-wage growth in its future budgets, said Tom Bond, OSU compensation administrator. He called the wage increase situation not unmanageable.
The University of Findlay expects to cover higher wages for about 800 students because strong enrollment should provide enough financial cushion to prevent cuts in hours, a spokesman said.
Heidelberg College in Tiffin is evaluating its options.
Obviously, it s going to take some creativity in some departments, said Steve Storck, vice president for administration.
Colleges not on radar
When the proposed minimum-wage increase was placed on the ballot, most of the attention went to restaurants and other businesses. Supporters argued the wage increase would boost living standards, while opponents predicted it would cause layoffs.
The law s effect on universities wasn t much of an issue during the campaign, frankly, said Tim Burga, director of government relations for the Ohio AFL-CIO, which lobbied for the increase.
Some of the most prominent subjects of the debate stayed quiet. McDonald s would rather not be drawn into a discussion about the minimum wage, said Joe Woods, a Cleveland-based spokesman for the chain.
Michigan s situation
The staggered minimum-wage increase approved by Michigan s Legislature earlier this year did not have as quick an impact on colleges there.
Because the fiscal year for academic institutions starts in July, Michigan colleges had the advantage of integrating the increase into their 2006-2007 budgets before the state began upping its minimum wage in October. Now $6.95 an hour, Michigan s wage will reach $7.40 in July, 2008.
Dilemma at Bluffton
In Ohio, officials at Bluffton University e-mailed each other the morning after the Nov. 7 election, wondering how they could afford to meet the new hourly baseline of $6.85, a 33 percent jump.
We ve invited supervisors to see if there are ways to make sure the student earns the amount of money they re contracted to earn but work fewer hours, Mr. Fulcomer said.
About two-thirds of Bluffton s 1,200 students hold campus jobs, a work ethic stemming from the university s philosophy that participation in the community leads to prosperity in the classroom. The jobs vary from delivering mail to cleaning dorms.
Experience motivates some students as much as money does.
A senior majoring in art, Cara Rufenacht designs pamphlets, posters, and mailings for Bluffton.
It s something I can use, Ms. Rufenacht said. I can put it on my resume. It will further my career.
Although her hourly wage is scheduled to climb from $5.65 next year, Ms. Rufenacht anticipates losing two hours from her eight-hour work week to balance the raise. That, she said, could undermine the scope of the design portfolio she ll give prospective employers after graduation.
More trouble ahead?
About 63 percent of Ohioans receiving the minimum wage are younger than 24 years old, the prime age for attending college, according to a recent study by Florida State University Professor David A. Macpherson.
Those demographics hint at a troubling long-term paradox. Organizations such as the AFL-CIO crusaded for a higher minimum wage in order to fill people s wallets, but the actual incomes for students could remain flat. Only their hourly wages would grow.
An inconsistency between Ohio law and the U.S. budget could accelerate this trend. Ohio s new minimum wage adjusts annually for inflation. Funding from the Federal Work Study Program doesn t.
The $980 million program covers 810,000 college students nationwide, awarding an average of $1,447 to each student for the past several years despite tuition growing at a pace more than double inflation.
That funding covers many of the part-time jobs students have. Unless the federal work study program is also pegged to the Consumer Price Index, student work hours likely will dwindle year after year.
Without any reforms to the federal system, the problem might result in vanished student jobs, said Frank Hribar, vice president of enrollment services at Siena Heights University in Michigan.
At some point, it just makes no sense to reduce the number of hours a student works, and just reduce the number of jobs available, Mr. Hribar said. What looks like it s helping students is really affecting them negatively one way.
Siena Heights responded to Michigan s minimum wage increase by trimming work hours to eight from 10 and hosting a part-time job fair in September, where private employers could hire students no longer able to find enough work at the university.
When you consider the cost of tuition, it s part of our responsibility to help them pay for their education, Mr. Hribar said.
Contact Joshua Boak at: firstname.lastname@example.org or 419-724-6728.