Good News on Election day - Nationwide, minimum wage measures saw victories and Ohio was no exception. Ohio citizens voted to give 719,000 Ohio workers a raise in 2007. This is a clear victory for Ohio workers who’ve been struggling to make it on $5.15 an hour. 

Bad News Since - The Republican legislature passed a bill in the lame duck session that tries to cut home care workers and others out and limits workers’ ability to join together to sue those who break the law. In the guise of implementing what the voters had passed, legislators actually explicitly defied voter intent. Their unconstitutional move will surely spark an immediate lawsuit. Talk about lame…..

The legislature also gutted consumer protection during the December session, passing a bill that would take away wronged consumers’ right to sue for non-economic damages. It was that threat that kept unscrupulous sellers in check – if they bilked consumers, they knew they might have to pay real money. Outgoing Republican Attorney General Jim Petro and incoming Democratic Attorney General Mark Dann agree that the new scheme is a consumer killer – and consumer advocates are urging Governor Taft to veto the ill-advised bill and keep in place the modest consumer protections that we have.

Employment Stays Flat - Employment in Ohio remains on its recent plateau, according to seasonally adjusted payroll numbers for nonfarm wage and salary jobs released Nov. 21 by the Ohio Department of Jobs and Family Services (ODJFS). The number of jobs in Ohio has ebbed slightly over the summer and fall months, declining by 9,000 since its recent peak in May. More info here.

Recession Looming? - Job growth’s been weak, but could get worse if our friends at the Center for Economic Policy Research are right – they think the economy’s headed toward another recession. If so, Ohio could be in the miserable position of having fewer jobs at the end of a national economic expansion than it had prior to the previous recession. Read the CEPR predictions here.

TABOR Tabled - But 2006 was, in some ways, a good year for policy. A year ago, we worried that state budgets would be stymied by an absurd amendment to cap spending. The so-called TABOR proposal in Ohio was withdrawn by supporters before it hit the ballot, in part because of the outcry from local governments who knew it would cripple their ability to provide basic public services. Ohio legislators passed a weak version of what supporters had hoped to put on the ballot – a bad move to be sure. But voters here and elsewhere rejected the most extreme forms of this measure. In sixteen states, TABOR-style budget busters were being pushed a year ago. Not one of the original proposals has become law.

Hey, thanks for asking - Ohio elected officials are seeking our advice. On education, energy, economic development, taxes, wealth building and workforce policy, our phone is ringing at Policy Matters with transition teams asking us to take part, elected officials coordinating strategy sessions, and requests for analysis. In addition to assisting whenever we’re asked, Policy Matters will be coming out with a comprehensive economic plan early in the new year. A new year, new elected officials, a new report from Policy Matters…. we hope all will lead to new prosperity for you and for Ohio.

That’s all!
The Policy Matters Ohio Team 

On November 7, 2006, over two million Ohioans voted for an amendment to the state constitution that raised the minimum wage and indexed it to inflation. The amendment offered broader coverage to Ohio workers than federal law. In the waning days of a December “lame duck” session, the Ohio legislature passed implementing legislation (House Bill 690) that undermined the new constitutional amendment. Policy Matters Ohio and other groups objected to the bill, most notably because it denied coverage to home health care workers, part-time police and fire personnel, outside salespersons, and others who clearly should be covered.

Under Strickland Administration, the Department of Commerce interpreted the details of the legislative language to close some of the loopholes that the legislature tried to open. For example, the Department’s interpretation covers home health care workers, amusement park workers, and certain farm laborers.

Now that most Ohioans are covered by the state minimum wage, the challenge of enforcement shifts to the state. The number of minimum wage and overtime complaints filed with the Department of Commerce during the first half of 2007 is more than double the level of the first half of 2006, but staff levels have not kept pace. Policymakers should pay close attention to whether the volume of complaints continues at a high level, and should provide more resources if necessary.

Recent federal minimum wage legislation may have little effect on Ohio. By the time the federal minimum wage increase is fully phased-in at $7.25 an hour in July 2009, Ohio’s minimum wage likely will be at this level, if not greater, due to its built-in inflation adjustment. Full coverage under the new amendment, coupled with strong enforcement, is essential to provide a minimum standard of living to Ohio’s workers.

Click here to read our testimony on the initial version of the implementing legislation. The final version of the bill restored the Department of Commerce’s ability to conduct employer-wide investigations and removed a provision that banned agreements to work for less than minimum wage, but did not address the other concerns raised in the testimony.

For additional information, read a letter sent by Professor Ken Kowalski of the Cleveland State University Marshall College of Law to the Senate Insurance, Commerce, & Labor Committee on December 19, 2006 stating reasons why the bill is inconsistent with the constitutional amendment.

(Read the letter.)

Five years after the recession, Ohio employment is still in the doldrums

Five years after the official end of the last recession, Ohio employment remains in the doldrums. The state is still more than 30,000 jobs short of the total it had in November 2001, at the end of the recession. Over the past year, the state has added a mere 1,200 jobs, according to seasonally adjusted payroll numbers for nonfarm wage and salary jobs released Dec. 29 by the Ohio Department of Job and Family Services (ODJFS). The number of jobs in Ohio has fallen by 12,000 since its recent peak last May.

Full Report

Ohio Employment Moves Sideways

Employment in Ohio remains on its recent plateau, according to seasonally adjusted payroll
numbers for nonfarm wage and salary jobs released Nov. 21 by the Ohio Department of Jobs and Family Services (ODJFS). The number of jobs in Ohio has ebbed slightly over the summer and fall months, declining by 9,000 since its recent peak in May.

Full Report

Book Talk - Deceptive and divisive campaign ads have been scary, but author David Callahan believes that Americans have more in common and are far less divided than some politicians would have us believe. Join us for a post-election talk on values we all share, November 13th at Cleveland State University’s Levin College forum on 1717 Euclid, from 4:00 to 6:00 p.m. Callahan’s The Moral Center has gotten rave reviews in the New York and L.A. Times, which said “Read this book for [Callahan's] eye-opening portrait of the way we live now, his sobering analysis of how we got here and his prescient warning of where we may be headed if we don’t get back our bearings.” Professor Cam Stivers, Reverend Mylion Waite, and our own Amy Hanauer will also participate in a discussion, along with you. 

Tax-plan unmasked - Forty-five percent of Ohioans would end up paying higher taxes while only 30 percent would see taxes lowered, based on an updated analysis of the details available on Ohio gubernatorial candidate Ken Blackwell’s plan for a flat 3.25 percent income tax. Meanwhile, the richest Ohioans would each eventually reap thousands of dollars on average in annual tax savings, and the state would lose more than $800 million a year in revenue. State funding would be slashed leading to cuts in programs, increases in local taxes, and other eerie consequences.

Haunted Schoolhouse - Ohio charter schools operated by White Hat Management received $100 million in state funding last fiscal year. Although state law requires companies that operate charters to provide a detailed accounting of spending and services, the full picture remains cloudy one year later.  State rules, as currently enforced, do not demand the full breakout of expenses that the public has a right to see, and other public schools already provide. Our report makes recommendations to ensure that for-profit operators aren’t playing tricks on Ohio taxpayers.

Minimum Wage - There are just days left before you all vote on the referendum to raise Ohio’s minimum wage to $6.85. The proposal would give raises to 719,000 low-paid Ohio workers, states with higher minimums have had more job growth, and attempts to scare supporters are all smoke and mirrors.

No treats for jobless Ohioans - Ohio employment continues to trend downward, according to September numbers from the Ohio Department of Jobs and Family Services. The number of Ohio jobs dropped by 10,000 since the recent peak in May. Ohio employment remains a frightening 137,000 jobs, or 2.5 percent, below the job base of March 2001, when the last recession officially started. Ohio is one of just eight states that have lost jobs since the recession began.

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Halloween Quiz -
1. About what do more than 650 economists agree? Click here to find out.
2. How many Ohio workers are certified as having lost their jobs due to our monstrous trade deficit? Check your next e-news to find out…..
3. How could Ohio gain jobs, reduce foreign oil use, and clean up our environment? Click here.

That’s all!
The Policy Matters Ohio Team 

Ohio policy news is as variable as this week’s weather is predicted to be – sunny potential in energy, better economic policy, free tax preparation and a minimum wage boost; stormy progress on tax proposals and job growth.

Tax proposal falls flat - Forty-five percent of Ohioans would end up paying higher taxes while only 30 percent would see taxes lowered, based on an updated analysis of the details available on Ohio gubernatorial candidate Ken Blackwell’s plan for a flat 3.25 percent income tax. Meanwhile, the richest Ohioans would each eventually reap thousands of dollars on average in annual tax savings, and the state would lose more than $800 million a year in revenue. Thanks to the Institute on Taxation and Economic Policy, we were able to analyze the evolving proposal, as new details emerged. All iterations of the policy turned out to be flat-out misguided.

Growth for all - Ohio worker productivity, Ohio executive compensation and national corporate profits have all risen steeply in inflation-adjusted terms in the past few years, while the minimum wage has declined in real terms, the median wage has stagnated, and the average wage has grown at a snail’s pace. These are the findings of a new report by Policy Matters Ohio and the Center for American Progress (CAP). Room to Grow: Ohio Can Afford a Higher Minimum Wage finds that increased productivity and profits provide room for a minimum wage increase in Ohio. 

No poaching here - As Cleveland considered working with nearby suburbs to prevent destructive inter-city competition for jobs, Policy Liaison Wendy Patton decided to gather intelligence on how to help communities avoid poaching and counter-poaching among neighbors. Though they are uncommon, we found several, described in this September 2006 background memo.

Who Takes Credit? - More Cuyahoga County families received free tax preparation at volunteer income tax assistance sites in 2006 than in any previous year. The Cuyahoga EITC Coalition helped working families claim more than $4.2 million in federal credits and avoid exploitative tax preparation and early refund fees. We also surveyed these modest-income families and found – surprise! – they plan to spend much of the money in the community. See the report here. This and other good work inspired the National Community Tax Coalition (LINK) to appoint Policy Matters’ research assistant David Rothstein to its Steering Committee.

Clean EDGE - Our friends at the Economic Policy Institute and the Apollo Alliance looked at where jobs would be generated if the federal Clean Energy Development for a Growing Economy (Clean EDGE) Act were passed. The EPI/Apollo study finds that the Clean EDGE Act would spur $49 billion in renewable energy investment and create 530,000 U.S. jobs by 2009. Ohio, with our existing industrial infrastructure, would be a big winner, standing to gain almost 26,000 jobs.

But we haven’t gained ‘em yet - Employment in Ohio snuck downward slightly since its recent peak in May, declining by 7,000 after last spring’s increase. Since June of 2005, when an overhaul of state taxes was signed into law with the intent of creating jobs, employment in Ohio grew by just 31,900 jobs, a rate of 0.6 percent. During the same period, the nation added 2.1 million jobs, for a growth rate of 1.6 percent. Read our JobWatch report here.

That’s all!
The Policy Matters Ohio Team 

Ohio Employment Continues Downward Trend

Employment in Ohio continues to trend slightly downward, according to seasonally adjusted payroll numbers for nonfarm wage and salary jobs released Oct. 24 by the Ohio Department of Jobs and Family Services (ODJFS). The number of jobs in Ohio has declined by 10,000 since its recent peak in May.

Full Report

Ohio charter schools operated by White Hat Management received $100 million in state funding last fiscal year. Although more information is becoming available on the use of these funds, the full picture remains opaque a year after the Ohio General Assembly required companies that operate charter schools to provide a detailed accounting including the nature and costs of the services they provide at each school. Specifically:

• White Hat has not reported how much it spends instructing its 14,729 students, compared to administration, building operations or other kinds of expenses. This information is easily available for other public schools.
• The company does not disclose how much it spends buying textbooks.
• A substantial share of White Hat’s expenses at the schools it operates – nearly half at its Life Skills schools – goes toward overhead or purchased services. Thus, we still don’t know clearly how this money is being spent, and it is impossible to get an exact reading of how much the company is making in profits.

This October 2006 report examines information provided by the White Hat schools as part of the Auditor of State’s annual audits for the 2004-2005 school year as well as five-year financial forecasts made last fall to the Ohio Department of Education. It finds that today’s rules, as currently enforced, do not require the full breakout of expenses that the public has a right to demand, and other public schools already provide. The report also makes recommendations on how to tighten the rules and create more accountability.

Press Release

Executive Summary

Full Report

Ballot amendment would raise low pay
By Jon Newberry

Cincinnati Enquirer

A proposed Ohio constitutional amendment to hike the state’s minimum wage from $5.15 an hour to $6.85 has supporters and opponents battling over privacy issues as well as money.

Many opponents contend the measure will hurt working people more than it will help them – and say a bigger issue is the threat they claim it poses to privacy.

In addition to increasing the minimum wage for roughly 5 percent of the state’s 5.6 million workers, the proposal contains other provisions that require employers to:

Maintain complete pay records for all employees from date of employment through at least three years after they leave.

Provide free copies of those records to any employee or “person acting on behalf of an employee.”

Jim Mundt, regional director of White Castle operations in Greater Cincinnati, said the proposal doesn’t set any limits on the number of times someone could request pay records and that the recordkeeping requirements would apply to all employees, not just hourly employees.

“We see this as a way for union organizers to get a lot of information that they don’t have access to now,” he said, calling it “an invasion of privacy bill masquerading as a minimum wage bill.”

Supporters call those claims overblown. They focus on the economic benefit that they say poor working people would get from a higher wage.

“It’s a start. It’ll bring them up some,” said Doug Sizemore, a member of the Machinists Union and the executive board of the Cincinnati AFL-CIO. “It’s the right thing to do.”

He thinks the constitutional amendment is needed in Ohio because the federal government and the state legislature haven’t done enough to help working people. The federal minimum wage of $5.15 hasn’t been increased in nine years, Sizemore notes.

The amendment also would require the minimum wage to be automatically adjusted every year, based on changes in the cost of living beginning in 2008.

Columbus-based Ohioans for a Fair Minimum Wage, which supports the amendment, counters the privacy charges by saying similar provisions in nine other states have not led to invasions of privacy.

The amendment only gives someone a right to inspect his or her own payroll records – and anyone else who wanted access would have to have that employee’s consent, it said.

The group also said the proposal doesn’t impose any new requirements on employers, who already must maintain similar records under federal law.

320,000 AFFECTED

Privacy issues aside, the impact of the proposed wage hike is also a matter of disagreement, although both sides more or less agree on the number of people who would be directly affected by the measure because they now make less than $6.85 an hour.

A study by Florida State University economist David Macpherson concluded that the hike would directly affect about 320,000
employees, 63 percent of whom are aged 24 or younger. His study was conducted for the Employment Policies Institute, which opposes the measure.

The AFL-CIO, which supports the proposal, says 297,000 Ohio workers would be directly affected.

Amy Hanauer, executive director of Cleveland-based think tank Policy Matters Ohio, noted that more than 400,000 additional Ohio workers would indirectly benefit because they now make somewhat more than $6.85 and will likely get raises if the minimum-wage hike passes.

More than half of all affected workers live in the poorest 40 percent of households, she said. “It’s a relatively well-targeted way of dealing with low incomes,” she said.

She and other proponents also say states with higher minimum wages create more small businesses and small-business jobs.

BUSINESS EXPENSES

Meanwhile, many business people – but not all – oppose the measure because say it would drive up their costs.

Frisch’s Restaurants Inc. has made a rough calculation that its overall pretax expenses in Ohio would increase by $3 million a year if the minimum wage amendment passes, said Don Walker, the company’s chief financial officer.

“The only thing that you could do, if that goes through, I’m sure everybody would raise their prices,” he said.

And it could lead to fewer jobs, he said. “We would have to look at, what does this do to our economic model … if you can’t recoup it with a price increase.”

Walker pointed out that the minimum wage for servers, who wait on tables and rely on tips for most of their pay, is now $2.13 an hour. Under the proposed amendment, it would increase to half of the new minimum, or $3.43. Since Frisch’s typically pays the minimum wage for servers, that’s a direct increase in its expenses of $1.30 for every hour worked, plus higher company expenses for Social Security and Medicare.

Lorrie Paul Crum, vice president of corporate communications at Sandusky-based Cedar Fair LP, which bought Kings Island earlier this year, said a minimum wage hike would increase its costs but wouldn’t result in job cuts.

“Our priority is going to remain the same,” she said, citing safety and customers’ enjoyment of its parks as its top concerns.

“Is it going to devastate us? Absolutely not. Is it going to cost us more? Yes, absolutely it will.”

WHO BEARS THE COST?

Steve Cobb, an economist at Xavier University, said the effect of a higher minimum wage could be fewer jobs, increased prices or lower profits, depending on the circumstances of individual businesses and how much the added wage expense raises their total expenses.

If it’s a small fraction of overall expenses, a company might be able to absorb the added cost.

But if a company employs a lot of unskilled labor – as is common for retailers and fast-food chains – it would have to react in some way.

“That ultimately determines who bears the cost,” Cobb said.

How a company reacts also depends on its competitive situation, including alternative options for customers.

Some companies in Southwest Ohio, for example, might have trouble raising prices if customers can instead go to Northern Kentucky or Southeast Indiana, where the minimum wage would remain $5.15. In that situation, companies would probably have to either reduce jobs, accept lower margins, or fold, Cobb said.

A STARTING POINT

At White Castle, where the base starting pay is $6.75 and the average wage is $10 plus more than $4.50 in benefits, Mundt sees the issue differently.

“Everybody feels good about raising the minimum wage,” he said. “But it’s a starting point … for people with little or no skills and no record of reliability.”

White Castle hasn’t been able to hire qualified workers at minimum wage for at least 30 years, he said.

When the minimum wage goes up, everyone else expects a raise too, he said. The end result is higher prices.

Or fewer jobs.

“That’s the first thing you’d try to (cut), in order to hold prices down,” he said.

Dayton Daily News

By William Hershey

Columbus — Torrie Gregg of Dayton View, a single mother who’s raising five children and working for $6.25 an hour at McDonald’s, plans to vote for Issue 2 on Nov. 7, a constitutional amendment to raise the minimum wage from $5.15 to $6.85 an hour.

Steve Bowser, president of Bowser-Morner Inc., engineering and testing firm in Huber Heights, plans to vote “no,” mainly because he thinks provisions in the amendment would invade his employees’ privacy and make it hard to recruit high-quality talent.

With less than a month until the election, supporters, led by organized labor and faith groups, are casting the campaign as a battle for economic fairness and justice.

Opponents, mainly business groups, are trying to shift the focus from dollars and cents to parts of the amendment that require employers to keep and, upon request, release an employee’s payroll records with information such as addresses and pay rates.

For Gregg, it’s about money.

Late in the evening while her children — the eldest 8 and the baby is 2 — sleep, she begins her weekly workout, trying to stretch her pay and juggle bills.

“I’m always behind in something. Before I even get my paycheck, the money is always gone,” said Gregg, 24, a member of ACORN, a group backing the proposal. “It’s crazy and it’s hard.”

She said she whittles bills a little at a time, often not able to pay the whole bill at once. “I always try to pay them something. It’s a struggle and it’s a headache, when you get a disconnect in the mail,” she said.

She’d welcome a 60-cent per hour raise if voters approve the amendment.

“Any little bit is better than nothing,” she said.

A study this year by Policy Matters Ohio, a liberal-leaning research group in Cleveland, concluded that an estimated 719,000 Ohio workers would benefit from the amendment. That includes 297,000 who now make less than $6.85 an hour and an additional 423,000 workers earning at least $6.85 an hour, but who would likely get modest raises as employers adjust pay scales to accommodate the new minimum.

However, a separate review of the proposal by Matthew Carr of the Buckeye Institute for Public Policy Solutions in Columbus, a conservative-leaning research group, concluded that raising the minimum wage would slow job growth and that the poor would be harmed the most.

“When the price of something increases, people demand less of it,” Carr wrote. “As the cost of employing low-wage workers increases, employers will hire fewer of them.”

Meanwhile, Bowser does not like the part of the amendment that provides annual increases in the minimum wage, pegged to the Consumer Price Index.

“I have a lot of concerns about putting this into the state constitution and locking in inflation adjustments every year. I have no idea what the long-term consequences of that are,” said Bowser, 54, whose firm has 150 employees, 115 in Dayton and 35 in Toledo.

His biggest concern, however, is the requirement that his company would have to make available to an employee or someone “acting on behalf of an employee” payroll records with personal information.

State Issue 2:

Ohio Fair Minimum Wage Amendment

What: A constitutional amendment on the Nov. 7 ballot to raise Ohio’s minimum wage from $5.15 to $6.85 an hour on Jan. 1, 2007

Secretary of State: sos.state.oh.us, click on Election Day, Nov. 7, 2006; information includes the ballot language, arguments for the issue and arguments against.

Supporters include: Dayton City Commission, Ohio Council of Churches, Let Justice Roll, NAACP Ohio, We Believe Ohio, Association of Community Organizations for Reform Now, Ohio AFL-CIO and Ohio Democratic Party.

Opponents include: Dayton Area Chamber of Commerce, Englewood-Northmont Chamber of Commerce, National Federation of Independent Business-Ohio, Ohio Council of Retail Merchants, Ohio Grocers Association, Ohio Hospital Association, Ohio Manufacturers’ Association, Ohio Restaurant Association and Ohio Society of CPAs.