Sponsor Testimony on House Bill 34 (Minimum Wage) — Brigid Kelly, Commerce and Labor Committee
Summary
Sponsor testimony on House Bill 34, legislation to modernize Ohio's minimum wage, from State Representative Brigid Kelly to the House Commerce and Labor Committee. The testimony states that House Bill 34 will gradually phase in a $15 minimum wage by 2023, and that as written the bill would have raised the minimum to $12 beginning January 1, 2020 and then by $1.00 an hour each year until 2023. It says the minimum wage rose to $8.70 per hour ($4.35 for tipped employees) that January. It quotes a 2019 report from Policy Matters Ohio and a 2017 fact sheet from the National Employment Law Project, and ends by offering to answer questions.
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“Sponsor Testimony on House Bill 34 (Minimum Wage) — Brigid Kelly, Commerce and Labor Committee.”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-01-22-commerce-labor-testimony-hb34kellysponsor-2ee2a3e9b1/
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Columbus Office: Committees:
Vern Riffe Center Finance
77 S. High Street, 11th Floor Finance Subcommittee,
Columbus, Ohio 43215-6111 Health and Human Services
(614) 466-5786 Federalism
Brigid.Kelly@OhioHouse.gov State and Local Government
(Ranking Member)
BRIGID KELLY
State Representative
Chair Manning, Vice Chair Dean, Ranking Member Lepore-Hagan, and members of the House Commerce and Labor
Committee, thank you for the opportunity to provide sponsor testimony on House Bill 34, legislation to modernize
Ohio’s minimum wage.
The promise of America is that it is supposed to be the land of opportunity,
where if you work hard, you can succeed, and you can get ahead. The bad
news is that too many people in Ohio know it doesn’t matter how hard they
work. Their families still live, and often struggle, paycheck to paycheck. In
fact, since 1979, productivity has risen six times faster than hourly
compensation for the typical U.S. worker.1
The good news is this is a problem that can be solved. It doesn’t have to be
this way. Profits and productivity can continue to go up, but wages should,
too. By modernizing our minimum wage, more people can earn the
opportunity for a better life.
A constitutional amendment passed in 2006 stated that Ohio’s minimum
wage shall increase on January 1 of each year by the rate of inflation. This
January, the minimum wage increased to $8.70 per hour ($4.35 for tipped employees). House Bill 34 will gradually phase
in a $15 minimum wage by 2023, lifting pay for millions of workers and reversing decades of growing pay inequality. As
written, the bill would have increased minimum pay to $12 beginning on January 1, 2020 and increased yearly by $1.00
an hour until 2023, when it reaches $15 per hour.
Raising pay is good for families and good for communities. According to a 2019 report from Policy Matters Ohio2, ($15
minimum wage would improve incomes, increase equity):
“ A $15 minimum wage by 2023 would lift
wages for 2 million Ohio workers, 37
percent of the wage-earning workforce.
Nearly 1.6 million directly affected workers
(26 percent of the workforce) would receive
an average increase of $2.73 per hour in
2018 dollars. The average directly affected
worker puts in 30.6 hours per week, and
would see an earnings boost of $4,252.
Another 450,000 workers would benefit
from a spillover effect as employers raise
wages of those making more than $15 in
order to attract and retain their workforces.”
1 https://www.epi.org/press/job-growth-stays-solid-but-wages-disappoint-again/
2 2 https://www.policymattersohio.org/files/research/minimumwage2019.pdf
According to a 2017 Fact Sheet from the National
Employment Law Project3:
“Cost of living data from the Economic Policy
Institute shows that in all fifty states—in both
rural and urban areas—$15 an hour is the
minimum wage that a single adult working full-
time will need by 2024 to cover basic living
expenses— including rent, food, transportation,
health care, and taxes. And workers in expensive
regions, or workers with children, will need even Urban: $15.32
more.” Rural: $15.61
Minimum wage earners aren’t just young adults working
over the summer. Instead, they are between 26 and 54
years of age, many of whom have at least some college
education.4 They are people who want jobs where they
can build a life, save for retirement, and take care of their
families.
Successful businesses--large and small--have shown that
good wages are good business. Showing up to work every
day and working hard to contribute to your company’s
bottom line shouldn’t mean you have to rely on food stamps or cash assistance just to get by. It shouldn’t mean you
have to choose between rent and reliable transportation, or between packing lunch and keeping your lights on.
The current minimum wage leaves a full-time worker in Ohio with approximately $18,096 dollars a year, before taxes,
and about $3,000 below the federal poverty line for a family of three. Employers that pay poverty wages are ultimately
subsidized by taxpayers as their employees are forced onto federal and state safety net programs just to get by. Safety-
net benefits for low-wage workers and their families make up more than half of spending on Medicaid, welfare (TANF),
food stamps (SNAP), and the earned income tax credit, and cost federal and state taxpayers more than $150 billion a
year5.
A 2019 report from National Low Income Housing Coalition6 notes that the Fair Market Rent (FMR) for a two-bedroom
apartment in Ohio is $818; to afford this level of rent and utilities — without paying more than 30% of income on
housing — a household must earn $2,727 monthly or $32,728 annually. So, with the 2019 minimum wage of $8.55 per
hour, an Ohioan making minimum wage would need to work 74 hours per week to afford a two-bedroom apartment (58
hours for a one-bedroom). And between 2015 and 2017, 13.7 percent of households in the state experienced times
when they could not afford enough food.7
3 https://s27147.pcdn.co/wp-content/uploads/workers-in-all-50-states-will-need-15-by-2024.pdf
4 https://www.policymattersohio.org/files/news/minimumwage2018.pdf
5 http://laborcenter.berkeley.edu/the-high-public-cost-of-low-wages/
6 https://reports.nlihc.org/sites/default/files/oor/files/reports/state/OH.pdf
7 https://www.chn.org/wp-content/uploads/2019/01/State-Poverty-Snapshot_Ohio.pdf
In a 2019 study published in the Quarterly Journal of Economics, economists evaluated the local effect of more than 130
minimum-wage increases since 1979 and showed the fall in jobs paying less than the new minimum wage had been fully
offset by the jump in new jobs paying just over it.8 Raising the minimum wage means less turnover, longer careers, and
lower poverty rates.
We can’t afford to stay stuck in the past with poverty-wage jobs that don’t let Ohioans live up to their full potential.
Ohio’s minimum wage needs an overhaul to meet the demands of today’s new economy.
Two in five Ohio households struggle to come up with enough resources to provide basic necessities, including housing,
childcare, food, transportation, and health care. In Ohio, 14% of households live in poverty, and another 26% are
considered working poor.9 This is not how we build a strong economy or a strong state.
As home health care worker Chaundra Kidd of Cleveland said when we introduced similar legislation last General
Assembly: "This is about paying my bills, this is about taking care of my family, this is about the dignity for the work that I
do.”
This is the single biggest thing, the most transformative thing, we can do for people and families in our state is to give
them a raise.
I am happy to answer any questions.
8 https://www.washingtonpost.com/business/2019/07/08/its-not-just-paychecks-surprising-society-wide-benefits-raising-minimum-wage/
9 https://local12.com/news/childhood-poverty-a-cincinnati-crisis/united-way-2-in-5-ohio-households-struggle-to-afford-basics-10-05-2017
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