Employers in Athens, including Ohio University, are seemingly unsure how their employees and businesses will be affected by a 10 cent increase in the state’s minimum wage, which will come into effect Jan. 1.
Ohio’s minimum wage will be $7.95 for non-tipped employees, up from the current $7.85 rate. Tipped employees will make $3.98 for an hour’s worth of work in the new year, up from $3.93.
These policies can have a ripple effect on an employer’s business, said Quinn Schaller, owner of Big Mamma’s Burritos, 10 S. Court St. He said he’s unsure how he might afford to pay his employees, more than half of who currently work at minimum wage, more money.
“We can’t just give those working at minimum wage a raise; we have to give everyone a raise,” Schaller said. “Unfortunately, more senior employees have taken the hit because I can’t give them raises as much as I used to be able to.”
Schaller added that the effect of a rise in the cost of labor is significant, including the potential need to raise prices for goods and services.
“Someone has to pay for (the rise in labor costs); I’ve eaten as much of it as I can,” he said.
Schaller isn’t the only employer guessing the impact of a rise in minimum wage.
OU currently employs more than 2,000 minimum wage workers — all of whom are students, said Mary Alexander-Conte, OU’s payroll manager. The only tipped employees work at Latitude 39 in Baker University Center.
“The total effect won’t be known for a while,” Alexander-Conte said in an email to The Post. “Some departments may choose to give other students a raise if they are already at the new minimum wage.”
Students who work for minimum wage outside the university will feel a paycheck bump, too.
But OU student Rebecca Bright, who started working for Wendy’s, 40 S. Court St., last December, said the state’s increase won’t help her.
“With inflation, it won’t mean anything to me as a student,” Bright said, adding she feels the increase in pay will barely keep up with the cost of living as an OU student.
The state’s decision to increase minimum wage springs from an amendment to the state constitution passed in 2006, which gives an opportunity for minimum wage to increase annually to reflect inflation. The state uses the current federal minimum wage as a starting point and adjusts from there.
Brian Hoyt, spokesman for the Ohio Department of Commerce, said the index used to reflect inflation in Ohio’s economy rose 1.5 percent from Sept. 1, 2012, to August, but the increase is “not exceptional” compared to previous years.
Only companies that report gross receipts of $292,000 or more per year will be subject to Ohio’s minimum wage laws. Everyone else will still use the federal government’s $7.25 minimum wage, according to a press release from the department.
Federally, there’s a legislative push to escalate minimum wage from $7.25 to $10.10.
Regardless of what the federal government does, Schaller said he’s still got some adjusting to do for when the state increase kicks in.
“It is what it is,” he said.
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