When Ohio’s minimum wage automatically increases by 10 cents to $7.95 per hour at the start of 2014, roughly 330,000 workers will receive raises across the state, according to an analysis from the Economic Policy Institute (EPI).
That could be good news for all of Ohio: EPI found the minimum wage increase will benefit the rest of the state through nearly $39 million in economic impact and 300 new full-time jobs.
“Ohio workers and the Ohio economy will both benefit from this raise for our lowest-paid neighbors,” said Amy Hanauer, executive director of left-leaning think tank Policy Matters Ohio, in a statement. “The employees who benefit will turn around and spend money in our communities, stimulating growth here.”
The automatic increase is a result of a constitutional amendment approved by Ohio voters in 2006 that hiked the minimum wage to $6.85 per hour and pegged it to rises in the cost of living.
Ohio isn’t alone in the increase, however.estimates 10 other states — Arizona, Colorado, Florida, Montana, Missouri, Nevada, Oregon, Vermont, Washington and New Jersey — automatically increase their minimum wages each year to keep up with inflation.
The nationwide minimum wage hikes “will generate over $619 million in new economic activity and support creation of 4,600 new full-time jobs as businesses expand to meet increased consumer demand,” according to Policy Matters.
The projections come at a time progressives are working on the national stage to increase the federal minimum wage, which, at $7.25 per hour, is becoming increasingly irrelevant as Congress fails to keep up with many states’ minimum wage expansions.
President Barack Obama’s Fair Minimum Wage Law would raise the federal minimum wage to $10.10 per hour by 2015 and — perhaps most importantly — ensure the minimum wage increases each year to keep up with the cost of living. The left-leaning National Employment Law Project estimates the hike would help 30 million Americans and help grow the economy.
Opponents argue a minimum wage increase, especially one as
rapid as Obama’s proposal, would burden businesses with considerably
higher labor costs. They argue companies would drop
employees or raise prices to cope with higher expenses.
Advocates typically tout a minimum wage hike as a matter of basic fairness. They claim the federal minimum wage would be $10.55 per hour today if it kept up with inflation.