Is State Issue 2 on the Money?

Canton Repository - October 2, 2006

Canton Repository

By G. Patrick Kelley

Should the minimum wage be higher than $5.15? State Issue 2 would raise it to $6.85. Labor, community and religious organizations back the raise.

But a host of business organizations say the proposed constitutional amendment could cause job losses, and it carries some dangerous fine print that has nothing to do with the minimum wage.

John McGough, spokesman for Ohioans to Protect Personal Privacy, a campaign organization created to oppose the minimum wage amendment, said the businesses and organizations in the coalition are divided over raising the wage.

But the group’s research shows that less than 10 percent of the affected workers are the sole earner of a family with one or
more children, but the wage hike could cost 12,000 jobs for those people, McGough said.

Many are teens

About two-thirds of minimum wage earners are younger than 24, almost half still live with their parents and 40 percent are teenagers, he said.

The average annual income for homes with a minimum wage worker is $52,000 because so many of them are teens and younger workers who live with their parents, he said.

Another problem is that the minimum wage would be tied to the consumer price index, and rise with it, McGough said.

If that index should skyrocket like it did in the 1980s, there is no quick fix for a constitutional amendment.

Increasing the federal Earned Income Tax Credit — which provides money to low-earning heads of households — would be a better solution, McGough said.

The opposition agrees — partially — with that idea.

A good argument

“That’s definitely one of the arguments that we like,” said John Burton, an economist with the Center for American Progress, a nonpartisan research and educational institute. The center and Policy Matters Ohio, another non-profit research institute, say Ohio businesses can well afford to pay a higher minimum wage.

But raising the tax credit isn’t enough, he said. It should be tied to higher wages. He said the numbers of people applying for the tax credit show that there a “significantly” more than 10 percent of the affected workers are head of households.

Burton said the center’s research found that states with higher minimum wages experienced higher growth by small businesses.

Young and poor

Ohio minimum wage earners are divided into two groups, he said. One is “very young” people, but the other is of greater concern. “People who are locked into poverty.” At least 300,000 children in the state have at least one parent who would benefit from the increase, Burton said.

Amy Hanauer of Policy Matters Ohio said the state has experienced high growth in productivity, retail sector profits, corporate profits and CEO salaries, but pay for the middle class has stagnated, and minimum wage earners have lost ground to inflation.

“We found that states with higher minimum wages show higher productivity,” she said.

The second issue that the business coalition is united about is the records-keeping requirements of the amendment. It would require businesses to retain daily work records for every employee until three years after the last day of work.

Hanauer said companies already have to retain records for three years, but McGough said that’s oversimplifying. Federal law does require some records to be kept for hourly employees, but the amendment would require more records be kept for every employee, he said.

No charge

Another headache is that copies of the records must be given to the employees or former employees free of charge, as many times as requested, he said. But even more sensitive is that the amendment says the records also must be furnished to “a person acting on behalf of an employee upon request.” McGough said that could lead to unauthorized people gaining access to information, such as addresses and Social Security numbers.

“Those claims are patently false,” Hanauer said. People with access to the records would be “my attorney, my spouse” and in the case of a minor, “my parent.”

McGough said the amendment has no specification as to who can request the information.

Hanauer said the intent of that is to cut down on litigation, because to get those records now, former employees often have to sue. Companies would only have problems with those records “if you’re not paying the minimum wage,” she said.

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