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Minimum Wage Raise Is “Not Much In The Long Run”
< < Back to minimum-wage-raise-not-much-long-runDespite being paid more college students in Athens and many workers throughout the state have seen insignificant changes from the minimum wage increase.
The increase jumped from $7.40 to $7.70 statewide on Jan 1.
A 30 cent difference is not much in the long run, according to Ohio University Economics professor Richard Vedder, who offered his expertise on how the rising paychecks affect a larger scale state market.
Many economists agree that raising wages is the work of an overly involved government.
“Minimum wages are very much anti-laissez faire,” Vedder said. “Most economists say the negatives, outweigh the positives.”
According to Vedder the higher wages do two things: create unemployment because some employers can no longer pay as many workers at higher wages and it also raises the price of consumer goods in the long run.
In economic terms the supply and demand curves eventually cross at a higher point.
Local employers may not feel the pinch as much as big corporations who often pay minimum wage, Vedder states.
Most college students with work experience will not feel the effect on Court Street, Vedder said. The most impacted workers are those with limited skills and limited experience, such as high school workers at a McDonalds.
Owner of Brenen’s Coffee Cafe Josh Thomas said he already pays above the required minimum wage so he is not suffering any budget squeezes.
Wage increases do create a pattern, Thomas said, between worker pay and price of goods.
“A year from now, you’re kind of in the same boat – we’re all making a little bit more but everything costs a little bit more,” Thomas said. “It’s kind of a vicious cycle.”
Thomas said he is doing well enough – in his business and with his staff – that he will not allow the pricing pressures of ingredients or other goods to affect his prices.
His business remains steady, he said.
“Other years you might hear me grumbling, but this is a good year,” Thomas said.