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Higher minimum wage of $9/hour has pluses and minuses

By Jim Mackinnon
Beacon Journal business writer

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East High students Breauna Wilson, 17, senior, and Casey McGregor, 16, junior, stand with their shovels in front of East High School. The pair of students make minimum wage shoveling snow away from the doors of the school in the mornings. (Mike Cardew/Akron Beacon Journal)

Teens Breauna Wilson and Casey McGregor sometimes show up at East high school bright and early — 5:45 a.m. — to shovel snow from the entranceways to the building before their fellow students arrive for classes.

For that, they and other students hired to clear away snow get paid Ohio’s minimum wage, $7.85 an hour this year.

The teens like being paid and have plans for the money they’ve earned. And of course they’d like more of it.

President Barack Obama wants those minimum wage earners to make more money. In his annual State of the Union address last week, the president proposed increasing the federal minimum wage, now $7.25 an hour, to $9 an hour over the next two years.

It’s largely people like Breauna and Casey who would benefit by that increase.

People at or below the federal minimum wage make up just a small portion of the overall work force, government figures show.

And the largest chunk of minimum wage earners fall between the ages of 16 and 25. About half of all minimum-and-below wage earners in the U.S. are in that age range, according to the federal government. (That age group also has the nation’s highest unemployment rate — in January, teens ages 16 to 19 had a 23.4 percent jobless rate; the overall national jobless average was 7.9 percent.)

Increases in the minimum wage over the years have not kept pace with the cost of living, said John Russo, recently retired as a professor and founder of the now-disbanded Center for Working-Class Studies at Youngstown State University.

Russo favors Obama’s proposed increase.

“I think it will make a difference in people’s lives,” Russo said. “It’s not only positive, it’s necessary and it’s fair.”

The proposal to hike the minimum wage captures the “zeitgeist” or spirit of the country now, he said. “It increases the idea of fairness.”

Not only will a higher minimum wage boost the earnings of working people at the lowest end of the pay scale, it also should increase the income of higher-earning people, Russo said.

In addition, a higher minimum wage will help the national economy by giving people more money to spend, he said. “The economy is having problems because of insufficient demand,” Russo said.

Russo said he thinks there are many more people making the minimum wage or less than government statistics show. Most of the low wage earners work in retail and other parts of the service sector, he said.

Nationally, less than 5 percent of all wage earners over age 25 make the minimum wage or less, the latest figures from the U.S. Bureau of Labor Statistics show.

That figure holds true in Ohio as well.

There were approximately 150,000 people in Ohio paid at or below the federal minimum wage in 2011, meaning they made up 4.7 percent of the state’s work force of more than 3.2 million, according to the latest available data.

Jack Kleinhenz, economist at his Cleveland Heights firm Kleinhenz & Associates, doesn’t think that raising the minimum wage addresses what he calls the national economy’s larger problem, a “skills gap” in the work force.

“I would rather see us focus on our ability to get people prepared and better trained,” he said. “A higher wage does not solve that problem.”

Employers are mostly happy to hire people with the right skills, Kleinhenz said.

Low-end wage earners would benefit from an increase — but a higher minimum wage also could deter employers from adding people, Kleinhenz said. In many cases, a person’s first job pays minimum wage so a higher rate might keep more people from getting that critical first job, he said.

Budget constraints could force Summit County government to hire fewer people if the minimum wage goes up, said Leonard Foster, head of human resources.

Summit County government has few, if any employees making minimum wage, Foster said. The lowest grade on the county’s pay scale is $8.82 an hour, according to the county fiscal office.

Most of the county government’s minimum wage earners are students or interns who work summer jobs and for Metro Parks positions, Foster said.

The county currently has five employees working at the Board of Developmental Disabilities, a seasonal employee at Metro Parks Serving Summit County and 50 “Youth Employment for Success” participants who make less than $9 per hour.

Metro Parks hires approximately 100 seasonal workers who are paid less than $9 per hour, the county said. The number of Youth Employment for Success participants rises significantly during the summer based on the amount of grant dollars for the program, the county said.

“The impact [of raising the minimum wage to $9 an hour] is not as significant for us as for other folks,” Foster said.

Akron Public Schools primarily hires students at minimum wage to do such things as shovel snow, help custodians and work in after-school programs. This year, the school district has 62 student employees.

The school district estimates that raising the minimum wage from $7.85 an hour to $9 an hour would add $26,000 annually to the budget.

Ron Colando, assistant custodian at East high school and supervisor of the students who clear away snow, calls it a good program. The students need parental permission and are expected to report promptly to work as needed, he said. (He said he calls homes the night before to let the students know they need to show up early the next morning.)

Breauna Wilson and Casey McGregor are happy making what they can right now.

“I haven’t spent it yet. I still have the check,” said Wilson, who is 17 and a senior. “I have senior dues and a prom coming up.”

Wilson said she would like to see the minimum wage go up. “The prices for things are going up,” she said. “It makes a difference.”

McGregor, 16 and a junior, is in a welding program at the school and said he has spent some of his earnings on buying replacement welding gloves.

McGregor expects that after he graduates, he will be able to land a much better paying job as a welder — perhaps something paying as much as $25 to $30 an hour. He’s thinking he could move to the Gulf Coast and work on chemical plants.

“The money down there is a lot better,” McGregor said.

Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.