Correction on 12/16/2013: An academic study cited in this editorial stated incorrectly that Ohio’s minimum wage does not increase with inflation. Under a voter-approved 2006 amendment to the Ohio Constitution, the state’s minimum wage rises annually by the inflation rate. Ohio’s minimum wage is scheduled to increase Jan. 1 from $7.85 to $7.95 an hour for workers who do not receive tips, and from $3.93 to $3.98 for tipped employees. The higher minimum wage will apply to employers with gross receipts of more than $292,000 a year. For smaller employers, the state minimum wage, like the federal wage, is $7.25 an hour.
Ebenezer Scrooge does not administer Ohio’s safety-net programs. It just seems that way sometimes.
A new study by the National Center for Children in Poverty, a research and policy arm of Columbia University’s school of public health, looks at all 50 states’ work-support programs, which help working families make ends meet. For the most part, the comparison does not enhance Ohio’s reputation for generosity, or even effective and inclusive policy:
● Ohio has the nation’s stingiest income limit for getting child-care subsidies, the study notes. Our state set its income eligibility ceiling for such subsidies at barely $23,000 in 2012 for a family of three. The limit in the most-generous state, Alaska, was more than twice that amount, about $54,000.
Child care is the largest job-related expense for many working-poor families, says Curtis Skinner, the poverty center’s director of family economic security. The threat of losing these subsidies as household income rises can discourage a struggling worker from accepting a promotion or even a raise, he notes. That’s hardly a formula for economic growth, personal or collective.
● At the same time, Ohio does offer one of the three most generous tax credits among the states for child and dependent care, the study acknowledges; 20 states have no such credit to help working families offset the cost of child care.
Ohio families that earn less than $40,000 a year can get a tax credit of as much as $2,100. But the credit only partially offsets the effect of the state’s too-low ceiling for child-care subsidies.
● As Congress debates — or, more precisely, avoids a debate on — raising the federal minimum wage of $7.25 an hour, Ohio remains one of 20 states with a higher minimum wage. Ohio’s $7.85 wage is the nation’s 10th highest.
But only Ohio’s larger employers, with gross annual income of $283,000 or more, are subject to the higher wage rate. And Ohio’s minimum wage does not increase along with inflation.
● Ohio is one of 15 states, according to the study, that still tax the income of poverty-level families. In 2011, a single-parent household with two children that earned just $15,000 a year was subject to state income tax. The study notes that another 15 states and the District of Columbia give refunds to poor families through their income tax systems.
● Half the states piggyback a state earned income tax credit on the federal credit. Such credits reward work while helping working families stay out of poverty. Ohio does not offer such a credit.
● Unlike some other states, Ohio does not offer provisions for family and medical leave — paid or unpaid — that exceed federal standards for private-sector workers.
Themes in next year’s campaigns for governor and the General Assembly in Ohio are already emerging. They include the tax and budget policies of the Republican-dominated state government, the strength of Ohio’s recovery from the Great Recession, the pace of job creation and economic growth, and a state unemployment rate that now exceeds the national average.
Economic security that includes making work pay must become a major campaign issue as well. That debate needs to include discussion of the work supports that state government offers, or doesn’t offer, Ohio’s working-poor families to help them balance their own budgets.
As Ohio seeks to attract and expand private employment, it also must honor its unwritten, but vital, social compact with its workers and their families. The new study shows how far our state has to go to keep the latter commitment.