YOUNGSTOWN, Ohio (WKBN) – The federal minimum wage has not increased in more than five years, which Congressional leaders say is keeping people in poverty.
Earlier this week, Congressman Tim Ryan, D-Niles, called for an increase of the federal minimum wage to $10.10 per hour. But business leaders at the Youngstown-Warren Regional Chamber of Commerce wonder if raising the minimum wage is the best move for the economy.
“The minimum wage needs to be addressed. I think that businesses would agree with that in general. I think the challenge is that you have the federal government saying one thing and the state saying another,” Youngstown-Warren Regional Chamber President Tom Humphries said.
If the wage is increased to $10 per hour, skilled workers like emergency medical technicians, nursing assistants and others could find themselves at the federal minimum.
Humphries said the federal government should take the lead on the minimum wage and tie it to inflation to prevent large increases. Instead of leading to economic growth, such a large increase could have a negative effect.
“When you raise minimum wage up, everything goes up. And that is exactly why you need to put more thought into it. Because the ramifications and implications are much more significant than ‘oh, let’s just do that’,” Humphries said.
“If 70 or 80 percent of your cost is going to labor, and you do a 40 percent increase to your costs, there is not too many business that can take that,” he said.
Jobs in Youngstown could be impacted most of all since the wages in the area are slightly lower than national averages.
But economists say the impact on the overall economy could be minimal.
“If you look at the total percentage of the labor force that is receiving minimum wage, it is not that high,” said Youngstown State University economics chair Dr. Tod Porter.
Porter thinks Ryan’s proposal could have less to do with fighting poverty and more to do with politics.
“The latest downturn probably pushed a lot more people into that minimum wage range than had been true historically. I think that is part of the pressure for this kind of legislation right now,” Porter said.
Ryan pledged to live on minimum wage this week to help make the case the wage needs to be increased.