DAYTON — Ohio is set to have the largest increase in the state’s minimum wage since 2007, according to data from the Federal Reserve.
>>Ohio’s minimum wage will increase starting in January 2023
The state minimum wage will rise to $10.10 per hour non-tipped employees come January, that is 80 cents higher than it is now.
News Center 7′s Brandon Lewis says inflation is factored into the changes in Ohio’s minimum wage but some believe just because inflation raises the minimum wage, does not mean consumers will necessarily feel it.
Lewis spoke with the owner of the Smoke Spot in Dayton, Hassam Khan, on Saturday. The Smoke Spot opened its doors during the pandemic.
“It was hard for me with a pandemic and everything going up,” said Khan.
Businesses like this have had a tough couple of years dealing with the impact of COVID-19 and rising inflation.
“It was really hard but I took the step,” he told Lewis.
Khan said he had to raise his prices to fight inflation and while that was a tough decision, he believes it will help him pay his employees the new minimum wage in 2023.
“If inflation goes up and then we raise our prices, then that kind of compensates me raising up my employee costs, paying employees out,” he said.
>>PREVIOUS COVERAGE: Minimum wage in Ohio set to increase in 2022
Ohio voters passed a constitutional amendment in 2006 that made the minimum wage go up on Jan. 1 each year by the rate of inflation.
The minimum wage is tied to the Consumer Price Index, a popular measure of inflation.
It’s increased 8.7 percent over the 12 months from September 2021 to August this year.
Lewis says as a result, the state minimum wage will go from $9.30 per hour for non-tipped employees to $10.10 per hour at the beginning of 2023.
Kevin Willardson, an economics professor at Wright State University, told News Center 7 it’s important to consider how inflation has raised the prices on other things.
“You’ve seen some consumer good products that have increased 15 to 20 percent over the last year,” he said.
Willardson thinks as a result, this still makes it hard for consumers to truly see a difference in their wallets.
“The nominal wages have increased but due to the increased in the price of everything else, their actual purchasing power of their income hasn’t change,” he told Lewis.
It can be tough for customers like the ones who go to Khan’s shop.
He told Lewis he tries to provide the best customer experience he can and hopes they understand the circumstances businesses these days face.
“We have kind of a no choice situation we’re put into,” he said. “So, we have to raise our prices.”
The new minimum wage will apply to employees of businesses with annual gross receipts of $371,000 or more per year.
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