Other states will gain the competitive advantage if the Buckeye State adopts a $15 minimum wage & eliminates tipped wage
Ohio will serve its neighboring states a competitive advantage if it adopts a $15 minimum wage and eliminates the tipped wage, according to a new study by the McNair Center for Free Enterprise at Northwood University.
“In addition to giving states like Indiana, Kentucky, Michigan, Pennsylvania, West Virginia, and Wisconsin a competitive advantage, it will increase the costs of doing business in Ohio and make dining out more expensive,” explained the study’s lead author, McNair Center Director Dr. Timothy G. Nash.
“The Impact of Minimum Wage in Ohio” is a scholarly research study commissioned by the Ohio Restaurant & Hospitality Alliance. It examines the complex debate surrounding whether Ohio should raise its minimum wage and eliminate the tipped wage. The paper examines arguments for and against an increase in the Ohio minimum wage, and the economic impact of proposals like the One Fair Wage, which was recently rejected as a ballot proposal earlier this year by Ohioans.
Additionally, the study examines:
• The theory of minimum wage
• The competitiveness of Ohio’s economy
• Ohio and America in a post-COVID economy
Ohio currently has many strategic advantages, including one of the strongest manufacturing sectors in the United States and the sixth largest energy market in the country. Also, Ohio is a growing hub for AI and computer chip manufacturing. Ohio’s geography is advantageous, as its location is at the crossroads of the U.S., and it has ports that allow shipping to the Great Lakes, Mississippi River, Atlantic Ocean, and Canada.
Also, Ohio ranks high for having a very reasonable cost of living, and it is experiencing positive net population migration after decades of negative net population migration.
But Ohio does have challenges, as it is one of the highest tax states in the country, ranking 36th by The Tax Foundation in terms of business tax friendliness. Also, Ohio is currently among the 10 slowest growing states based on GDP data from the U.S. Bureau of Economic Analysis.
“Raising the minimum wage will exacerbate these challenges and cause problems for many employers and workers alike, negatively impacting job creation and business success,” Nash said. “Interestingly, 93% of all tipped workers surveyed want to keep the current tipping system, and it is becoming clear that non-Ohioans are lobbying for it.”
“The McNair Center study illustrated the excellent business climate in Ohio, which includes a very reasonable cost of living compared to other parts of the U.S.,” said John Barker, President & CEO of the Ohio Restaurant & Hospitality Alliance. “We don’t want to lose that competitive advantage, so when activists from California pushed for an initiative that would have raised the minimum wage by 43% in 14 months and eliminated the tip credit, we battled to keep it off the ballot in Ohio. Our survey work showed clearly that servers and bartenders want to keep the current tipping system, as they average $27 per hour from wages and tips, and our victory saved operators an average of $157,000 annual in higher labor costs.”
