Long-Simmering Minimum-Wage Debate Heats Up

Columbus Dispatch - September 4, 2006

Columbus Dispatch

By Rita Price and Alan Johnson

For Theresa Patterson, the minimum wage isn’t about politics or
morality. It’s about bus fare, grocery money and rent.

On a recent morning, the 52-year-old grandmother boarded COTA
buses four times, piled into a temp agency van twice and cleaned
bathrooms for eight hours at the Greater Columbus Convention Center.

She earned $42.

Randy Sokol is proud of the $5 breakfast he serves customers at Tee
Jaye’s Country Place Restaurants. But the cost of the meal could change if a proposed minimum-wage amendment is enacted.

The proposal would increase wages for tipped employees, such as
restaurant servers, from $2.13 per hour to $3.43, in addition to tips.

“It’s going to cost us on our bottom line,” said Sokol, coowner of the 10-restaurant chain in central Ohio. “The $5 breakfast may go by the

Those two situations frame the debate around a Nov. 7 ballot issue that
would boost Ohio’s minimum wage from $5.15 to $6.85 an hour.

The nation’s lowest-paid workers have not had a raise in almost 10
years. Stuck at $5.15 an hour while costs continued to rise, the federal
minimum wage recently hit a 51-year low in terms of purchasing power.

On this Labor Day, it barely buys two gallons of gas.

“The minimum wage is this football that’s thrown and thrown around,”
said Amy Hanauer, executive director of Policy Matters Ohio. “People are
beginning to take a stand.”

When federal government last increased the minimum wage, in 1997,
five states had higher rates of their own. Now, 22 do. Voters in seven
others, including Ohio, are expected to decide minimum-wage ballot
issues in November. And dozens of municipalities nationwide have
enacted even higher local wage laws based on area living costs.

“When you get into a situation like this, it’s because the legislature or
the Congress isn’t doing what the people want,” said George Zeller,
senior researcher at the Center for Community Solutions, a laborbacked
nonprofit group in Cleveland.

“Because the minimum wage is not indexed to inflation, if you’re not
raising it, then it is being cut,” he said.

Ohio upped its minimum wage this year from $4.25 to $5.15, matching
the federal rate. The ballot proposal would amend the state constitution, mandating a minimum of $6.85 with annual adjustments for inflation.

The amendment also would require employers to maintain pay records
for up to three years so that they would be available to employees or their representatives.

Critics say the package is a power grab by labor unions. It is sure to
hurt business and compromise privacy, they say, while robbing Ohio of
12,000 jobs and $202 million from an already-depressed state economy.

“It’s overreaching,” said Gordon Gough, of the Ohio Council of Retail
Merchants. “The state constitution is not the right body to address this.
The minimum wage should be a federal issue.”

David A. Macpherson, a Florida State University labor economist, has studied the Ohio proposal for the Employment Policies Institute, a business-backed nonprofit group based in Washington.

Voter-decided wage increases are Ohio is among seven states with a proposed increase in the minimum wage on the November ballot. broadly popular and often successful, but they’re terribly misguided, he said.

“There’s no free lunch,” Macpherson said. “Would you rather be making $5.15 an hour or nothing? “

Both sides agree on this much: About 300,000 Ohioans earn less than the proposed $6.85-an-hour minimum. Hanauer said another 420,000 low-wage workers earn at least $6.85 and likely would receive a
modest pay bump if the minimum increases.

Together, those two groups make up roughly 14 percent of Ohio’s work force.

Steve Mangum, a business professor at Ohio State University, said minimum-wage debates traditionally have been rooted in clashes between theory and practice, emotion and the bottom line.

Some studies have found that a 10 percent increase in the minimum wage reduces employment among the least-skilled — many of them teenagers — by as much as 3 percent.

“It’s not that one day, all these people are fired,” he said. “It’s more a ‘disemployment’ effect. The tradeoff, of course, is that the least-paid make more.

“A lot of it really does come down to a moral, ethical kind of issue, and what we think is fair,” Mangum said. “Does the market work, or does it occasionally need assistance? “

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