Ohio’s minimum wage to increase 15 cents in 2018

Ohio’s minimum wage is scheduled to increase on January 1, 2018, to $8.30 per hour for non-tipped employees and $4.15 per hour for tipped employees. The minimum wage will apply to employees of businesses with annual gross receipts of more than $305,000 per year.

The current 2017 Ohio minimum wage is $8.15 per hour for non-tipped employees and $4.08 for tipped employees.

The increase will affect About 146,000 Ohio workers who will get a small raise next month, according to an analysis by Policy Matters Ohio.

The liberal-leaning Cleveland think tank estimates another 478,000 workers who earn a little more than minimum wage will likely get a bump in pay because employers will adjust their pay scales to reflect the higher state rate.

The adjustment is expected to generate over $106 million in wages.

“This boost is good for Ohio’s economy, since low-income earners are likely to spend their raises to cover the basics,” said Michael Shields, researcher with Policy Matters Ohio.

The raise is really an inflation adjustment that acts as a safeguard to protect wages for the poorest earners from slipping backward. The Constitutional Amendment (II-34a) passed by Ohio voters in November 2006 states that Ohio’s minimum wage shall increase on January 1 of each year by the rate of inflation. The state minimum wage is tied to the Consumer Price Index (CPI-W) for urban wage earners and clerical workers for the 12-month period prior to September. This CPI-W index increased by 1.9 percent over the twelve-month period from September 1, 2016, to August 31, 2017. The Constitutional Amendment is available online.

The federal minimum wage has fallen by a quarter since 1968, according to Policy Matters Ohio, when it was worth about $10.00 in today’s dollars ($9.68 in 2016, $10.08 in 2017).

“Despite the inflation-adjustment since 2006, our state’s low wage workers are working for less than their counterparts did a half century ago,” stated Shields.

Since 1968, Ohio’s economy has grown by more than two-thirds. Shields said that low and middle income workers have lost ground because that growth has been captured by the wealthiest. Policy Matters Ohio found this July that a $15 per hour state minimum wage phased in by 2025 could boost the pay of about 1.8 million workers.

“Next week’s raise will help poor working Ohioans, but $8.30 per hour still leaves a full-time worker about $3,000 short of the poverty line for a family of three,” Shields said. “It’s time for Ohio to pass a state-level thoughtfully phased-in $15 per hour minimum wage.”

For employees at smaller companies with annual gross receipts of $305,000 or less per year after January 1, 2018, and for 14 and 15-year-olds, the state minimum wage is $7.25 per hour. For these employees, the state wage is tied to the federal minimum wage of $7.25 per hour, which requires an act of Congress and the President’s signature to change.

Employers can access the 2018 Minimum Wage poster for display in their places of business from the Department’s website.

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