Minimum wage in Ohio rises to $7 hourly Jan. 1

1/1/2008

Ohio's lowest-paid workers will get a belated Christmas gift starting Tuesday: a 15-cent-an-hour pay increase that will push the state's minimum wage to $7.

The increase is merely an adjustment for inflation, and although workers who benefit won't mind getting a few extra dollars in their paychecks, employers say the raise isn't likely to result in layoffs or price increases.

"You pretty much absorb it. That's what you do. It's part of doing business is how I look at it," said Jim Sautter, owner of Sautter's Five-Star Market in Sylvania.

The increase is the third in 21 months for the Ohio minimum wage, which prior to 2006 remained at $4.25 an hour for nearly 15 years.

But in March, 2006, the Ohio Legislature raised the minimum wage to $5.15 an hour in a bid to stave off a ballot initiative calling for an even bigger increase.

But voters approved an amendment to the state Constitution that raised the minimum wage by $1.70 to $6.85 an hour on Jan. 1, 2007.

Today's increase to $7 applies to employers who gross more than $255,000 annually.

Workers receiving tips, such as waiters and waitresses, will get a 7-cent increase. Their wage goes to $3.50 an hour from $3.43.

Health care, amusement park, and some agricultural workers are exempted from the state minimum wage law.

Although today's adjustment is a pay increase, the net effect is only about $6 a week for a minimum-wage employee working 40 hours a week.

But studies have shown most minimum-wage workers are part time.

"It doesn't sound like a lot," said Emily Poor, 16, of Toledo, who has a job as a medical filing clerk. "But it helps with the whole paycheck, which I get every two weeks."

The raise will help offset transportation costs for Abby Beham, a 16-year-old gymnastics instructor from Sylvania.

"I have to drive pretty far from my house to get to my job," she said. "I think it will help because it's really hard for me to pay for gas. Even though it's only a little bit, it will make a difference."

Dave Tippett, of the Employers' Association in Sylvania, said members seem unconcerned about the small increase.

"We've not had any folks calling us telling us, 'Boy, we're going to have to lay off folks or raise prices,'•" he said.

Rob Armstrong, vice president of Bennett Enterprises, which owns area Big Boy, Ralphie's, and Fricker's restaurants, said most restaurants won't need to cut employee hours or raise prices.

A recent study by the University of California at Irvine showed that a 40-cent wage increase boosts payroll costs by $16,000 annually for a business with 20 entry-level employees.

Barry Greenblatt, owner of Barry Bagels restaurants, said the $1.70 increase at the start of 2007 "was just huge." It affected employee wage scales across the board, not just those making minimum wage, he added.

"You had to take care of the people who were there four years and earning close to $7 an hour," he explained. "You can't look at those people who have been there with you three or four years and say all of a sudden you're only going to be making 15 cents more than somebody I just hired."

But today's 15-cent adjustment is "almost a nonstory," Mr. Greenblatt said. "It's a real small factor that's not going to change anything."

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.