New minimum wage could push employees over the poverty line

from The Post Online

Andrea Golby / Staff Writer / ag232304@ohiou.edu

This year, minimum wage workers in Ohio will make $1.70 more per hour — about the cost of a large fast food drink — and public officials say the extra cash might help low-income workers get closer to breaching the poverty line.

In Athens County, 20.6 percent of households have an annual income of less than $10,000, or about the annual salary full-time employee making the previous minimum wage of $5.15, said Tracy Galway, spokeswoman for the Athens County Department of Job and Family Services. That amount is $6,600 below the poverty line for a three-person family based on the 2006 guidelines.

With the new, statewide minimum wage of $6.85 an hour, which went into effect Jan. 1, a full-time minimum wage employee will make $14,248 a year. That total is still $2,352 under the poverty level, but every penny counts for families who are struggling to make ends meet, Galway said.

The 2004 unemployment rate in Athens County was 6.2 percent, while other Southern Ohio counties had rates as high as 10 percent, according to the Ohio Department of Development. Athens County, which has a poverty rate of about 27 percent, is unusual because a high poverty rate typically reflects a high unemployment rate, Galway said.

“People have jobs, they just don’t have enough to live on,” she said.

Galway said the biggest employers in the county are the local government and Ohio University, followed by businesses in the retail and service sectors, such as hotels and restaurants.

Local businesses will pay out $20,000 to $30,000 more in wages in 2007 than in 2006 because of the increase, said Larry Payne, the member services coordinator for the Athens Area Chamber of Commerce.

Kathy Hecht, Athens city auditor, said she expects income tax revenue to increase, though she can’t yet offer estimates of how much those increases might be. Hecht said a lot depends on whether employers increase only the wages of employees who earned less than minimum wage or also increase the wages of employees who used to make more than $6.85.

The new minimum wage has the potential to help some of Ohio’s low-income workers over the poverty line, but employers’ decisions about which employees receive pay increases ultimately will determine how many people are affected by the law, said Dennis Evans, a spokesman for the Ohio Department of Job and Family Services.

Policy Matters Ohio, a nonprofit policy research organization, found that 719,000 Ohioans — or 14 percent of the state’s workforce — would benefit from an increase in the minimum wage, said Amy Hanauer, the organization’s executive director.

Hanauer said 38 percent of those workers are the major providers of their families.

“It is pretty clear it is going to help low-income workers,” she said. “It is really a very positive jumping-off point.”

Employers who do not conform to the new minimum wage law will have to pay their employees back-pay, along with a penalty of twice the back-pay owed, said Denise Lee, a spokeswoman for the Ohio Department of Commerce, which is enforcing the law.