Ohio’s Minimum Wage Debate: A Study Reveals Potential Competitive Disadvantages
A recent study from the McNair Center for Free Enterprise at Northwood University warns that Ohio’s consideration of a $15 minimum wage and the elimination of the tipped wage could give neighboring states a competitive edge. Dr. Timothy G. Nash, the study’s lead author, asserts that such a move would raise business costs in Ohio and increase dining expenses, benefiting states like Indiana, Kentucky, and Michigan.
Commissioned by the Ohio Restaurant & Hospitality Alliance, the study, titled "The Impact of Minimum Wage in Ohio," dives into the complex implications of wage increases in the state. It evaluates both sides of the debate, including economic effects seen in proposals like the One Fair Wage, which was rejected in a recent ballot.
Ohio is unique in its economic strengths, boasting one of the nation’s largest manufacturing sectors and emerging niches in AI and chip manufacturing. Its strategic geographic position facilitates trade, making it vital in the post-COVID landscape. However, Ohio faces challenges as it is among the ten slowest-growing states based on GDP and carries one of the highest tax burdens in the country.
Nash indicates that raising the minimum wage could aggravate existing challenges, adversely affecting job creation and business viability. He notes that 93% of tipped workers prefer to maintain the current tipping system, highlighting a disconnect between activist proposals and the desires of local workers.
John Barker, President & CEO of the Ohio Restaurant & Hospitality Alliance, emphasizes the importance of preserving Ohio’s business-friendly environment. The initiative to raise wages was effectively kept off the ballot, reflecting the views of a workforce earning an average of $27 an hour when tips are included, thereby saving employers significant labor costs.
For more details, access the full study and executive summary online.
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Photo credit www.northwood.edu
