Wages for the typical worker in Ohio decreased between 2019 and 2022, according to an analysis of government data released this week.
The median hourly wage for workers in the Buckeye State slid from $21.81 in 2019 to $21.51 in 2022, according to the analysis by the Economic Policy Institute. Signal Cleveland asked the liberal Washington, D.C.-based think tank for the Ohio data it incorporated in its report, which focused on how wage growth in the Midwest has trailed that of the nation. Wages increased nationally and in the Midwest as a whole during the time period. Wages are adjusted for inflation. The report is based on an analysis of the federal Current Population Survey, which samples 60,000 households in the United States.
Ohio ranked third in the Midwest for the percentage of workers earning less than $15 an hour. The report found that 16.8% of workers here fell into this category. Kansas ranked first at 17.7%, followed by Iowa at 17.5%.
Median hourly wages for the typical worker in Ohio fell by 1.4% during the four-year period. Wages here increased to $22.60 in 2020 before beginning to slump, the analysis found.
In the Midwest, median hourly wages rose eight cents an hour, or 0.4%, to $22.10, according to the report. Nationally, wages increased by 69 cents, or 3.1% to $22.88.
“Historically the Midwest has been a place of opportunity for workers building the core products of the U.S. economy,” the report states. “But decades of relentless attacks on unions, bolstered by anti-worker policies, have undermined working families in the Midwest.”
The report says slow wage growth in the Midwest isn’t a recent occurrence. The Midwest median wage relative to the U.S. median wage has been on a downward trajectory since 1979. In comparison to the United States, median wages in the Midwest declined 8.4% between 1979 and 2022. This was a steeper drop than in any other region of the country, the report found.
The report says the Midwest is trailing, in part, because of “anti-worker policies.”
Anti-worker policies include right-to-work laws, the report says. Such laws determine whether workers are required to join a union as a condition of employment. The report also considers laws that limit public-sector collective bargaining rights as anti-worker.
Ohio doesn’t have a right-to-work law. Ohio voters overwhelmingly passed a referendum in 2011 overturning Senate Bill 5, which would have limited the collective bargaining rights of public employees.
The report says declining union membership has contributed to lagging Midwest wages. Union members, on average, are paid more than their nonunion counterparts, according to Bureau of Labor Statistics data. The median weekly wage for union members in the United States in 2022 was $1,216, versus $1,029 for nonunion workers.
In the Midwest, 28.9% of workers belonged to unions in 1979. By 2022, only 11% did, the report says. Nationally, 24.1% of workers belonged to unions in 1979. By 2022, only 10.1% did.
In Ohio, 33% of workers belonged to a union in 1979, the report says. By 2022, only 12.8% belonged. However, there were encouraging signs for union membership in Ohio last year. Union membership grew in the Buckeye State by 52,000, the third largest such increase nationally.
Leonard DiCosimo, who heads the North Shore AFL-CIO Federation of Labor, agrees that the decline in union membership has impacted wages, as have “anti-worker” policies. However, he said a wide range of factors have contributed to lower wages. DiCosimo said things such as higher interest rates and population loss influence whether employers will expand or relocate to Ohio, potentially creating a stronger labor market. (Ohio lost 8,284 residents in 2022, ranking the state 10th in numeric decline, according to the U.S. Census Bureau. Ohio was not in the top 10 for percentage decline.)
Other trends, such as employers opting for independent contractors and making the hiring process longer, have also had an impact on wages, DiCosimo said. For example, he said employers are trending away from a hiring process in which they make job offers after interviewing candidates two or three times in the course of a few weeks. He said now it is more common for candidates to have several interviews during a hiring process that could span several weeks. DiCosimo said this trend hasn’t favored workers, especially those not covered by minimum salaries set by union contracts.
“When there’s an increased time frame in terms of the hiring, a bit of desperation to get back into the workforce can build on the part of the worker,” he said. “They’ll accept any salary just to have a job.”
How worker-friendly trends could affect wages
The report discussed what the think tank considers to be “worker-friendly” policies. They include raising the state minimum wage and expanding Medicaid coverage to all residents who meet certain household income levels. The report says measures banning non-compete clauses, which prevent employees from taking positions with certain companies, are “worker-friendly.” So are laws banning mandatory captive audience meetings employers can hold with the intention of swaying workers during union organizing campaigns. Unions aren’t permitted to hold such meetings in the workplace.
Ohio participates in Medicaid expansion. In 2006, Ohio voters approved a constitutional amendment indexing the state minimum wage to the inflation rate. Ohio’s minimum wage is currently $10.10. Increasing Ohio’s minimum wage to $15 may appear on the ballot in 2024.
Sining Wang, an assistant economics professor at Case Western Reserve University’s Weatherhead School of Management, has researched the impact of raising the minimum wage.
Opponents of raising the minimum wage have argued that doing so will lead to layoffs and the hiring of fewer workers. They say that some employers won’t be able to afford the higher salary costs. Wang said his research, based on 20 years of data relating to minimum wage increases, shows otherwise.
“The current minimum wage is still fairly low,” he said. “Even if you increase it, the employers will not change their incentive to hire.”
The pandemic offered an example of this, Wang said. Many businesses increased wages in order to lure employees.
“If you travel the street, you will see that many fast food restaurants are hiring at sometimes double the minimum wage,” he said.