Cincinnati Edition: the ramifications of Ohio’s minimum wage increase
UC economics professor notes that many employers have raised wages past $10.10 per hour
Beginning in January 2023, Ohio’s minimum wage climbs from $9.30 to $10.10 per hour for non-tipped employees and from $4.65 to $5.05 per hour for tipped employees.
According to Michael Jones, PhD, associate economics professor-educator and Kautz-Uible Economics Institute Academic Director, many service industries and retailers have already raised employee wages to $15 per hour — the same wage proponents of a proposed ballot initiative want Ohio’s base wage to reach by 2028.
“Even for small employers that are paying less than ($10.10 per hour), they’re being forced to keep up because they can’t continue to attract workers unless they are able to match that,” Jones said during an appearance on WVXU’s “Cincinnati Edition.” “For many employers, the increase to $10.10 is not going to have a material impact on who they hire and how they are going about that process.”
Jones noted that as workers become more productive and bring more value, they will command higher wages.
“If they don’t get those wages from their employers, then another employer is going to hire that worker away,” Jones said. “We want to see a dynamic economy where wages are flexible, and workers jump from employer to employer to capture that higher value.”
When asked about the potential effects of a wage increase on a possible forthcoming recession, Jones brought up the economics concept “sticky wages.”
“Wages tend to not go down. Instead, employers will lay workers off,” Jones said. “Part of that is the morale effect when you’re making 10 percent less, that causes people to leave. Right now, we’re still seeing more job openings than individuals looking for jobs. In the short term, we’re still in a strong labor market.”
Featured image courtesy of Unsplash.
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