A reminder for Ohio employers and employees alike: The state’s minimum wage is rising to $8.55 an hour for non-tipped employees and $4.30 per hour for tipped employees effective Jan. 1, 2019.
The new minimum will apply to employees of businesses with annual gross receipts of more than $314,000 per year.
The current 2018 Ohio minimum is $8.30 per hour for non-tipped employees and $4.15 for tipped employees. The 2018 Ohio minimum wage applies to employees of businesses with annual gross receipts of more than $305,000 per year.
A constitutional amendment passed by Ohio voters in November 2006 states that Ohio’s minimum wage shall increase on Jan. 1 of each year by the rate of inflation. The state minimum wage is tied to the consumer price index for urban wage earners and clerical workers for the 12-month period prior to September.
That index increased by 2.9 percent over the 12-month period from Sept. 1, 2017, to Aug. 31, 2018.
For employees at smaller companies with annual gross receipts of $314,000 or less per year after Jan. 1, 2019, 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.
Michael Shields, a researcher at the labor-focused Ohio think tank, Policy Matters Ohio, said the new wage should be put in perspective.
“What’s really important to know about January’s adjustment is that it’s not a raise in terms of buying power,” Shields said in an email to this news outlet. “It’s more of a safeguard to prevent the minimum wage from slipping backward. That erosion … has bitten into the value of the minimum wage since its highest value, way back in 1968.”
The 1968 minimum wage of $1.60 is worth $11.83 today, he said.
“It’s pretty staggering to realize that low-wage workers in the middle of last century had stronger wage protection than exists today,” he added. “Think of how much the state and national economies have grown since then.”
Across the country, 20 states will raise their minimum wages for 5.3 million workers on Jan. 1, according to the Economic Policy Institute. The increases range from a $0.05 inflation adjustment in Alaska to a $2 an hour increase in New York City.