OSU wage model leaves questions
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).
For the rest of the Buckeye 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 OSU’s experiment as validation for that plan. The university is not like other employers — especially those in the private sector, nor will it be affected in the same way by raising its wage floor.
OSU receives funding from 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.
And, of course, it can increase tuition. Private-sector employers cannot increase prices without the risk of losing customers. Often, their only alternative is to lay off employees or reduce their hours.
OSU officials say 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. One wonders why tuition rates could not have been reduced with better “efficiencies.”
Of course, no one begrudges OSU employees a raise if their employer is able to afford it.
But for ordinary Buckeye State employers there would be plenty of pain. A $6.45 per hour increase in minimum wage during the next four years would be devastating. Employers would have to boost wages all across the board. The cost would be paid by consumers, laid-off employees or, more likely, both.
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.