Thursday, December 27th, 2012
Ohio's minimum wage set to increase
Local business owners say they're likely to raise prices of products
By Amy Kronenberger
While good news for some, the coming increase in minimum wage usually means higher prices for consumers.
On Jan. 1, Ohio's minimum wage is set to increase 15 cents per hour to $7.85. Tipped employees will receive an 8 cent increase to $3.93.
Businesses often pass the cost on to the customers.
"The more minimum wage goes up, the more prices go up," Steve Hamberg, owner of Padrone's Pizza, said. "You try to keep prices down, but when it starts hurting the store, you gotta raise prices."
Linda Hess, manager of Burger King in Celina, also said prices likely would go up.
"If they (minimum wage) go up, the food's going up; we don't have a choice," she said. "It's not rocket science to figure out."
Minimum wage is raised each Jan. 1 due to a constitutional amendment passed by Ohio voters in November 2006. The increase is tied to the Consumer Price Index for urban wage earners and clerical workers for the 12-month period prior to September. This CPI index rose 1.7 percent from Sept. 1, 2011, to Aug. 31, according to information from the Ohio Department of Commerce.
The rate increase applies to all employees 16 years old and older who work for a business with annual gross receipts of more than $288,000 per year. The 2012 minimum wage applied to employees of businesses with annual gross receipts of more than $283,000 per year.
Exemptions include any employee of the United States, employees of a solely family owned and operated business who are family members of the owner, individuals under the age of 16 and other conditions stated in the Ohio Revised Code.
Companies with gross receipts less than $288,000 and with employees younger than 16 must pay the federal minimum wage of $7.25 per hour.
Janel Kruse, general manager of Ottawa Oil, parent company of area Shell gas stations, said the 15-cent increase is much easier to swallow than last year's 30-cent hike. Wages also increased 15 cents in 2008, 30 cents in 2009 and 10 cents in 2011. Wages did not increase in 2010.
"Compared to the 30 cents from last year, this year isn't bad," she said. "It's hard when the government tells you what to do, and I'm not saying there shouldn't be guidelines, but we take it in stride."
Kruse said the increase in minimum wage would cost the company about $12,000, and that amount does not include adjustments to the rest of the pay scale. Employees who make minimum wage this year need to receive enough of a raise on Jan. 1 to make more than new employees who'll come in next year.
"If folks have been here a while, their wage goes somewhat above minimum wage," she said. "Then when minimum wage goes up, they feel gypped because they're not getting the same percent increase ... It tends to squeeze the people in the middle so we have to make an adjustment on that."
Hess and Hamberg said they also would have to adjust their entire pay scales. Although Hamberg doesn't like the forced pay raises, he said he understands.
"People that work for minimum wage, they work really hard jobs; they earn it," he said. "Most people don't know what it's like working in fast food ... and many (employees) don't have insurance, so that's all they have to rely on."
For Jessica Hamberg, Steve Hamberg's daughter and an employee, the additional $6 on her paycheck every week is welcome, but not life changing.
"I've got two kids," she said. "It helps ... it's just one more thing that keeps us going."