Ohio's Minimum Wage Rises — But Still Doesn't Buy What it Used to

Almost 60,000 Ohio workers will see their pay go up this year, but the state's minimum wage is still lower than it was a decade ago when adjusted for inflation

Jan 2, 2019 at 10:39 am

click to enlarge Ohio State House - Ohio House of Representatives
Ohio House of Representatives
Ohio State House

Almost 60,000 workers across Ohio got a pay raise starting Jan. 1, when the state’s minimum wage increased from $8.30 to $8.55 an hour. Tipped employees also saw their base pay go from $4.15 to $4.30 an hour.

That minimum wage applies to employees over the age of 15 working at companies that take in more than $314,000 a year. The federal minimum wage of $7.25 still applies to smaller companies.

Ohio voters passed a constitutional amendment in 2006 requiring that the state’s minimum wage rise with inflation. The price of consumer goods — the key metric used to measure inflation — rose by almost 3 percent in Ohio last year.

Ohio is one of 20 states raising its minimum wage, and across the country, more than 5 million workers will see slight or significant increases in their hourly pay. New York, for example, increased its minimum wage to $15 an hour, a $2 increase.

While Ohio’s minimum wage has increased, it still isn’t as high as it has been when adjusted for inflation. Ohio’s minimum wage was $7.30 an hour a decade ago — the equivalent of $8.71 an hour today. And in 1968, Ohio’s $1.25 an hour minimum wage was worth $9.24 an hour in today’s dollars.  

Today, an employee working 40 hours a week at Ohio’s minimum wage earns $17,784 a year — just $1,600 above the federal government’s poverty guidelines for a two-person family.

Some have argued for a bigger boost to the minimum wage, saying it will help alleviate poverty, lead to raises for other hourly workers, stimulate spending and lower the costs of social welfare programs over time. Opponents of that idea, however, say big minimum wage hikes will put more pressure on employers by raising labor costs, slowing economic growth and leading to layoffs. Research on the effect of minimum wage increases has been mixed, but seems to show a small percentage of jobs lost in places that have raised the minimum wage.