A representative from Policy Matters Ohio says the new minimum wage will help encourage economic development. Others are unconvinced.
Uptown business owners and Athens City officials disagree over what this year’s 15-cent increase in minimum wage could mean for Athens.
The wage increase is estimated to bring $36.3 million in consumer spending to the state’s economy, according to a report by Policy Matters Ohio, a nonprofit organization and liberal research group.
“Just that increase alone could have a significant impact on (development) in our local communities,” said Hannah Halbert, a researcher for the organization.
The state increased minimum wage from $7.95 to $8.10 an hour beginning Jan. 1. Tipped workers received a seven cent increase to $4.05.
However, if workers are below 16 years of age or the corporation makes less than $297,000 in gross receipts annually, employees will be issued the standard federal minimum wage, which is set at $7.25.
For some, the minimum wage increase is a double-edged sword.
“There will be an impact, and mostly it’s going to impact small businesses,” said Pete Couladis, Athens County Republican Party Chair. “They may have to raise their prices or they may have to cut their employees.”
Michael Carson, a manager at Brenen’s Coffee Cafe, 38 S. Court St., said he doesn’t foresee any changes being made to his shop.
“I think this is the best year we’ve had so far,” he said. “I don’t see it jamming up the works or anything.”
He said Brenen’s employees are tipped workers and make well above the minimum wage when tips are factored in.
With the exception of 2010, minimum wage rates have varied yearly ever since an amendment to the state’s constitution in 2006, State Rep. Debbie Phillips, D-Albany, said.
The amendment stated minimum wage would be reevaluated each year depending on the state’s inflation rates.
Phillips said the wage increase should not only benefit those earning minimum wage, but the state’s economy as a whole.
“Obviously it directly affects people who are minimum wage earners,” she said. “But generally it has a ripple effect.”
However, Phillips said this year’s increase still falls below a living wage for families.
In Athens County, a living wage is more than $15 an hour — or $31,619 a year — for a family of two adults and a child, according to a study done by the Massachusetts Institute of Technology.
“I think it’s important that people are paid a living wage,” Phillips said.
Couladis said he considers the lack of job growth in Athens to be the most pressing economic issue regionally. He added that instead of raising the minimum wage, more corporate entities should be brought into the region to create these jobs.
Bill Bias, Athens County treasurer, also said there aren’t enough economic opportunities for low wage earners in Athens, though he said minimum wage increases should have a positive effect locally.
However, Bias added that he’d like to see the state’s minimum wage increased to more than $10 an hour.
“We certainly have quite a few minimum wage workers,” he said. “Even though it’s a small increase for the workers its quite a significant increase for them.”
Richard Vedder, a professor emeritus of economics at Ohio University, said he was unconvinced about the positive effects of raising minimum wage.
“I tend to be skeptical of it,” he said.
Sometimes minimum wage increases can have the unintended effect of incentivizing employers to cut workers or hours, Vedder said, adding the increases could make it even harder for minorities or those with low education levels to be hired.
Vedder added that minimum wage increases often tend to mostly impact young people in middle class families who are already supported by middle class parents.
However, Halbert said there is an increasing amount of people who depend on a minimum wage salary to support their families.
“It’s not really just high school and college students any more,” she said. “It’s people who are trying to support a household on these low-income wages.”
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