OSU wage bump is an exception
Ohio State University has announced that, beginning next year, it will be raising its own minimum wage to $15 per hour — apparently jumping on the trendy number embraced by precisely zero state governments right now (though Washington, D.C. comes closest at a $14 per hour minimum wage in 2019). Washington, D.C. is joined by only seven states (California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey and New York) that plan to have minimum wages of $15 per hour by 2025.
For the rest of the state the minimum wage is $8.55 per hour, though there is a proposal in the state senate to raise that to $12 next year and implement $1 yearly increases until it reaches $15 in 2023.
State lawmakers should not view Ohio State’s experiment as validation for that plan.
Ohio State is not like other employers, nor will it be affected in the same way by raising its wage floor.
Ohio State receives funding from both the state and federal governments (i.e., taxpayers). It is allowed to go out and seek millions upon millions from donors. It can negotiate broadcast contracts for its sporting events and receive grant funding for its programs.
All those revenue sources mean Ohio State has the same kind of fat to trim as most other institutions of higher learning. In this case, it says the “ongoing administrative efficiencies program” across the university will easily fund the expected $19 million it will cost to raise its minimum wage to $15.
That kind of thing doesn’t happen in the real world.
Of course, no one begrudges Ohio State employees a raise if their employer is so painlessly able to afford it.
But for ordinary employers there would be plenty of pain. A $6.45 per hour increase in minimum wage over the next four years would be devastating. Remember it is not just a raise for minimum wage employees, but likely also for those currently earning somewhere just above minimum wage, if employers hope to maintain their wage scales. Even Ohio State understands it will also have to increase the wages of employees who now earn $15 per hour to $16 per hour.
Doing right by Ohio workers is important — lawmakers know that. Using Ohio State’s plan as a model for doing so won’t get us there.