Columbus to decide on requiring higher minimum wages for companies receiving tax breaks
With the cost of living increasing, Ohio’s minimum wage of $9.30 an hour isn’t cutting it for Columbus residents, said city officials and affordability experts.
There is little city leaders can do about it, with the Ohio Statehouse claiming control of minimum wages in the state.
“Unfortunately, we have a state house that does not believe in workers’ rights as much as we do here at City Hall, and they have really strong-armed and pigeonholed us -- we are not able to change the minimum wage for the entire city,” said Nick Bankston, Columbus city councilman, during a meeting Tuesday of the council’s Economic Development Committee.
But, city council can require companies to pay higher minimum hourly wages if they want to take advantage of Columbus' economic development tax breaks. The city first set that minimum at $10, before raising it to $12 and then $15.
With the way inflation has been rising, a $15 minimum wage is no longer enough, said local economist Bill LaFayette.
The committee is considering raising it again to $18.50 or $20 an hour.
“A boost from $15 to $18.50, or $20 an hour is actually much less of an increase than it might seem,” he said.
LaFayette advised the committee on how it should adjust the program to ensure public dollars aren't helping create low-wage jobs that burden social services and make it difficult for families to survive, and to ensure the increase will keep up with always evolving economic factors.
“My recommendation is actually to adopt the floor, be it $18.50 or $20 index to inflation using the consumer price index, if that's possible, and update that floor annually. That way there's going to be no decay in floor’s value over time, and no need to revisit this question every few years,” LaFayette said at the meeting.
LaFayette said the minimum wage threshold communicates “an expectation that Columbus employers will pay their workers a fair wage” and is an acknowledgment that the cost of living and the cost of city services are “steadily increasing.”
Jobs that don’t pay living wages often create extra expenses for the community and make it harder to pay for basics like housing and childcare.
Without public assistance, a single parent needs to make between $22 and $25 an hour to be self-sufficient, LaFayette said.
“The point is this however you calculate it, a $15 wage doesn't give lots of households what they need to stand securely on their own,” he said.
LaFayette said requiring companies to pay higher wages in exchange for tax incentives could deter new companies from coming to the area, but it’s still a good move.
“Now this policy may cost Columbus some projects that will go somewhere else. But that's okay. low wage jobs are still going to be created, lots of them, it's just that they won't be incented. We want workers to be able to support themselves in their households with a living wage,” he said.
A city analysis shows most companies benefitting from the tax incentives already pay more than the minimum threshold of $15 an hour, except in the warehouse and logistics industry.
“Really, the only sector that we found to potentially be affected by an increase in wages would be the distribution logistics sector,” said Quentin Harris, deputy director of Jobs and Economic Development for the city.
Harris said with the market slowly increasing wages, too, Columbus will still be a competitive business recruiter.
The Economic Development Committee is expected to make recommendations to the council as a whole to act on them some time before the end of the year. People interested in weighing in can reach out to Bankston's office, he said.