An increase in minimum wage at the beginning of the New Year will help about 25 percent of Athens County workers cope with the rising cost of goods.
On Jan. 1, 2011, the state of Ohio's minimum wage will increase 10 cents an hour, from $7.30 to $7.40. Tipped employees who make $3.65 an hour plus tips will receive a five-cent increase to $3.70, according to an Ohio Department of Commerce news release.
Service occupation jobs, which include jobs in the retail and food service trades, will be the most affected by the minimum wage increase because those workers are paid minimum wage or just above, said Nick Claussen, spokesman for the Athens County Department of Job and Family Services.
Service occupation workers make up 25.1 percent of the workforce in Athens County, according to the Athens County Department of Job and Family Services 2008-2009 annual report.
This percentage is larger than the 2009 state average of 17.8 percent, according to the U.S. Census Bureau's website.
The state's minimum wage is recalculated every year to account for inflation, said Dennis Ginty, spokesman for the department.
We have seen prices go up in the past few years
Claussen said, adding that a person's basic needs, such as gas, clothes, food and school supplies, are becoming harder to obtain because of the rise in prices.
Ohio is able to increase the minimum wage every year as needed because of an amendment to the state constitution passed in November 2006 that can increase minimum wage at the beginning of each year to reflect inflation in the economy. This ballot initiative made Ohio's minimum wage greater than the federal minimum wage of $7.25 an hour, according to the release.
The state minimum wage is tied to the Consumer Price Index, an inflation index calculated by the Federal Bureau of Labor Statistics, for the 12-month period prior to September, Ginty said.
The department calculates the needed increase in minimum wage as stated by the instructions in the amendment, Ginty said. The department uses the CPI to measure the inflation rate that minimum wage should reflect, he added.
This year, from Sept. 1, 2009 to Aug. 31, 2010, the CPI rose 1.4 percent, according to the release.
When the CPI increase is calculated, the wage increase must be rounded to the nearest five cents, which created the 10-cent increase in minimum wage this year, according to the amendment.
Not all employers are required to pay employees the state minimum wage. Starting in 2011, smaller companies grossing less than $271,00 a year are only required to pay the federal minimum wage to employees, according to the release.
Currently, small companies that are only required to pay the federal minimum wage gross less than $267,000 annually, according to the release.
The department does not calculate the number of businesses in Ohio that fall into this category, Ginty said.
The 10-cent increase in minimum wage will help Athens County residents pay for goods and necessities in the coming year, Claussen said.
An increase in minimum wage would have a positive impact by bringing home more money each day he said.
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Rachel Snively
