Ohio's minimum wage did not rise on January 1 of this year. When they changed the law back in 2007, Ohio's minimum wage rose from $5.15 to $6.85. After that, it was to rise each year at a rate indexed to inflation. On 1/1/08 it went to $7 then increased to $7.30 on 1/1/09. Does that mean that there was no inflation in Ohio or the U.S. as a whole over the course of 2009? I now own a business, so I am curious as to why it did not change this year (though my future employees will make more than that, I still want to keep them a bit of a distance from the minimum for motivational reasons).

 

I think there was a thread about this in the past but I could not find it.

 

edit: "mothivational" is not a word

There was no inflation for the purposes of inflation-indexed rules - Social Security-ers aren't getting a rise either.

Having had to manage through that initial rise in Ohio's Minimum Wage rate, I too was anticipating it to rise again.  In a way I'm glad it didn't since wages for all of my staff have been frozen since July 2008.  I hope that business picks up so I can push my starting wage ahead again of the minimum.

 

  Are inflation-adjusted rates supposed to go down if inflation is negative? I can't imagine that it would be popular to lower the minimum wage.

 

  We had deflation a few years in the last century.

 

 

Not generally. The U.S. gov't has basically assumed that it will encourage a controlled amount of inflation. Real, sustained deflation is really, really bad news for the economy.

Minimum wage will climb to $7.40 on January 1 2011, a 1.4% increase.

 

http://www.com.ohio.gov/laws/docs/laws_MinimumWage2011.pdf

One of my minimum wage workers just brought to my attention that $7.70 will be their new rate starting in January.

 

I have to chuckle at some of the headlines associated with those states that are required to raise minimum wage based on inflation indexes.  They invariably say that those workers are going to see more in their paychecks.  Maybe some will, but many will see their hourly wage increase but the number of hours worked decrease.  If the sales are not there to support the labor rate increase, then there is no gain.

Are you planning on cutting your employee's hours?

^Yes, there will be reductions.  In a typical week I spend about $1,500.00 in payroll for minimum wage workers which comes to approximately 202.70 hours of labor.  In January there will be roughly 6 hours per week cut from the minimum wage workers schedules because I will still only have the $1,500.00 to spend on payroll.  That may not seem like much, but if you're a student every hour counts.  It can be the difference between eating noodles or pizza for dinner.

I have a business in an industry in which minimum wage employees are quite common.  However, I do not have even one employee even close to minimum wage, as I cannot find competent employees that will work for that amount even in this economy.  I sure wish I knew where you guys find these people.

^Sometimes it comes down to location, type of work, flexibility in scheduling and other benefits.  I'm lucky because I get students that need to be downtown anyway for classes and find chunks of time to work.  They also don't mind the working conditions and the employee discount (textbooks are expensive).

 

I don't know what type of business you have, but maybe there are other things besides higher wages that you need to look at to retain the competent staff.

It really does depend on what type of business it is. If it is physical work or work that takes several months to learn how to do well, minimum wage won't cut it. People see "minimum" think they can get away with the minimum. If it's a fun job where people get to be around those their own age all day, meet the opposite sex, sweat minimally and don't have to be there at 5AM, minimum wage can work. When I worked as a stagehand, the cheapest employees (not minimum wage) were often the most expensive. Some would have to do stuff twice, waste materials, come in hungover, no-show, quit all the time, get in fights, would lack attention to detail, get mouthy, etc. Those who were paid only a few dollars an hour more had way fewer problems -- often these were the same people as before! They took more pride in their work. No amount of cajoling or management skill would help. A mouth can only do so much. But a dollar sign could.

 

At the bookstore, you've probably got some great kids working there that will go on to big things and they know that. It's probably quite the pleasant place to work as well. When guys are sweating their asses off in a hole and know that they aren't going to be moving up any time soon (if ever), they will figure out ways to screw you out of more money than if you just paid them more.

I must have been snoozing, because I didn't notice that Ohio's minimum wage did indeed go up to $7.70 on January 1; which is an increase of 4%. Inflation's back.

Here we go again...  In my companies case, this would just mean less hours to spread among the current employees.  No one is going to make any more per week unless I eliminate employees.  Sales are not going to magically increase because of a higher minimum wage and I can't raise prices because it will just drive the customers to the competition.

 

http://www.cleveland.com/business/index.ssf/2012/07/minimum_wage_hike.html#incart_hbx

Minimum wage hike supporters to rally for $2-an-hour increase

 

PARMA, Ohio -- A coalition of labor and nonprofit groups believe Congress should raise the minimum wage, and they intend to rally their cause Tuesday outside of Parmatown Mall.

The mall was primarily chosen because it, like most of its counterparts, is home to retail and fast food establishments, where minimum wage jobs proliferate, said Cathy Kaufmann, deputy Ohio director of the Fight for a Fair Economy, part of SEIU, or the Service Employees International Union.

"We're having this national day of action to get a message to our elected officials that we are serious about how the minimum wage is not a livable wage," she said.

I wouldn't worry too much

$9.80's quite high. I can certainly see that increasing unemployment. Labor is one of the few costs of a small business that's fairly easy to control. And it makes is tougher for states to meet their welfare-to-work requirements.

That is just a bad idea all around.

Ohio Minimum Wage is now $7.85, up from $7.70.

The poor job creators :-(

If the federal minimum wage had held up with inflation from 1968 all the way to today it would be closer to $11.  Cutting people's hourly pay to save a couple hundred bucks and completely ignoring the fact that due to inflation they are actually giving pay cuts every year due to the decline in purchasing power year over year sounds like a tough place to work!  Hopefully no one stays very long so they can move on to jobs with a more livable wage.

 

It should also be noted that in any company where people work for years in their adult life at or near minimum wage, the company is benefiting from a form of corporate welfare. We are all paying for the welfare programs that keep those minimum wage employees living stably through our taxes and debt. No one can live on $7.70 a year, and while some companies pay that to people like college students at a book store who are not I tending to stay or work full time, others pay that for full time careers expected to last years and years. For those jobs the individual often ends up on Medicaid, food stamps or welfare so we essentially subsidize the private companies workforce salary. Without those programs, these companies wouldn't be able to find a quality workforce willing to live in a shelter or in squalor then come to work everyday and be a successful worker.

^Baggers in Australia gets $20 an hour.

Australia's minimum wage is $15 an their unemplpyment is 5.3%.

Subway pays $15 an hour in North Dakota.

ND is a bit of an unusual example due to the natural resources boom going on there at the present.

You're also paying close to Manhattan level rents in ND.  $15 isn't such good pay when you keep that in mind.