$10.10 minimum wage would help Ohio

- March 25th, 2013
   

Increasing the federal minimum wage would reduce inequality, keep workers out of poverty, reward work, create jobs and help our economy.

 

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Federal bill would bring jobs, money to Ohio

Increasing the federal minimum wage would reduce inequality, keep workers out of poverty, reward work and help our economy.[1]

The minimum wage is worth much less than in the past after inflation is considered. This contributes to growing income inequality and makes it harder to stay out of poverty, even with full-time work.

A new proposal introduced by U.S. Sen. Tom Harkin and Rep. George Miller would increase the federal minimum wage to $10.10 by the year 2014 in three steps (to $8.20 initially, to $9.15 in 2014 and to $10.10 in 2015), and make inflation adjustments after 2015. House Resolution 1010, the Fair Minimum Wage Act of 2013, would raise annual income for a full-time employee to a still-modest $21,000 from just $16,014 now in Ohio ($15,080 nationally). The bill would also raise pay for tipped workers for the first time since 1991, to $3.00 per hour initially from $2.13, and then by $.85 annually until it reaches 70 percent of the standard minimum wage. 

If the minimum wage had kept up with inflation since the high point in 1968, it would be $10.59 an hour today. If it had kept up with productivity it would be even higher, almost $18.75.

An increase to $10.10 would affect more than 30 million Americans, nearly one-quarter of the national workforce. Ohio workers are more likely to be affected than workers nationwide: only four states have more affected workers than Ohio. Twenty percent of Ohio’s workforce – 943,000 people – would benefit directly as the new rate exceeds their current hourly wage. Another 327,000 employees who already earn slightly above the new levels could see a boost in earnings as employer pay scales are adjusted upward.  The increase would result in an average annual pay hike of $2,829 for full time employees.

Ohio demographics

The proposed wage increase would have the greatest impact in Ohio for women, workers over 20 years old, and people who work more than 20 hours a week. Not surprisingly, it would boost the wages of Ohioans living in low-income households more than the wages of higher-earning households. Of those who would be affected by the increase:

  • Fifty-six percent are women;
  • Eighty-six percent are over 20 years old;
  • Eighty-two percent work more than 20 hours weekly, 47 percent work full time;
  • Although affected workers live in households across all income levels, 60 percent live in households that make less than $50,000 a year and 50 percent live in households that make less than $40,000 a year.

The wages of these workers are important to their families:

  • Twenty-three percent of Ohio’s children have at least one parent who would be affected by the increase;
  • Families with workers who would be affected rely on those workers for half of the family earnings, on average. One quarter rely on those family members for the entire family income.

Raising worker wages would have a big impact, not only on workers and their families, but also on their communities. Ohio worker wages would increase by $2.1 billion, money that would be pumped back into Ohio’s economy as workers purchase goods and services. Pumped back through the economy, this money would create some 5,800 new jobs in Ohio and about 140,000 jobs nationally by the time it was fully phased in. These would be permanent positions.

In short, a higher minimum wage would improve worker lives, circulate money through the economy, create jobs and relieve poverty.


 

Congress has raised the minimum wage just three times in the last 30 years. Ohio is one of 19 states with a minimum wage above that of the federal, and one of 10 states that raises the wage each year to keep up with inflation. The federal minimum wage is currently $7.25 while Ohio’s is $7.85 per hour. During his 2013 State of the Union speech, President Barack Obama called for an increase in the minimum wage to $9.00 per hour. This fact sheet models the impact of the $10.10 proposal introduced by Sen. Harkin and Rep. Miller. Ohio cosponsors of the Senate or House version include Sen. Sherrod Brown and Representatives Joyce Beatty, Marcia Fudge, Marcy Kaptur and Tim Ryan.




[1] This brief was written by intern Michelle Newman and executive director Amy Hanauer, using data from the Economic Policy Institute, www.epi.org/publication/bp357-federal-minimum-wage-increase/.