Ohio’s minimum-wage workers earned a boost in January 2024, with the state’s new minimum wage increasing to $10.45 per hour for non-tipped employees and $5.25 per hour for tipped workers.
This was the effect of a constitutional change approved in 2006 that linked the minimum wage with inflation. However, not everyone was pleased with the pay increase, particularly in the healthcare industry, where many firms experienced financial difficulties and were forced to lay off employees or decrease their working hours.
The Effects of the Minimum Wage Increase on Healthcare Employers
According to the Ohio Health Care Association (OHCA), which represents over 1,000 long-term care facilities in the state, the minimum wage rise raised the industry’s yearly labor expenditures by an estimated $100 million.
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The OHCA stated that many of its members were already dealing with the repercussions of the COVID-19 pandemic, which lowered occupancy rates, raised infection control costs, and resulted in staff shortages. The OHCA also stated that the state’s Medicaid reimbursement rates were inadequate to address growing healthcare expenses and that federal relief monies were insufficient and ephemeral.
As a result, many healthcare businesses were forced to make difficult financial decisions, such as layoffs, reduced hours, salary freezes, benefit reductions, or facility closures. According to an OHCA study performed in December 2023, 62% of its members intend to cut personnel in 2024, 58% aim to reduce hours, and 54% expect to freeze pay. These measures impacted nurses, nursing assistants, nutritional aides, housekeepers, and laundry staff.
The Effects of the Minimum Wage Increase on Healthcare Workers
The minimum wage hike was intended to aid low-income workers, but for many healthcare professionals, it had the opposite effect. Instead of making more money, many lost their employment, had their hours cut, or had their pay frozen. This had a detrimental influence on their finances, health, and overall well-being.
For example, Mary Jones, a nursing assistant at a Columbus nursing facility, was laid off in January 2024 after six years of service. She stated that she was making $11.50 per hour prior to the minimum wage rise, but she was ineligible for unemployment benefits since she did not work enough hours the previous year due to the pandemic. She said she didn’t have any funds and was struggling to pay her rent and utilities.
Another example is John Smith, a dietary assistant at a hospice in Cleveland, who had his weekly hours reduced from 40 to 32 in February 2024. He stated that he was making $10.75 per hour before the minimum wage hike, but he did not receive a raise since his company had frozen pay for all employees. He claimed he had to rely on food stamps and Medicaid to make ends meet, and he was concerned about his health-care coverage.
Conclusion
In summary, Ohio’s minimum wage hike in January 2024, which resulted from a constitutional change linked to inflation, elicited mixed views. While it helped certain low-wage workers, notably in the healthcare industry, it placed enormous financial costs on companies.
The Ohio Health Care Association projected a $100 million yearly increase in labor expenses, causing many healthcare organizations to impose layoffs, decreased hours, and pay freezes, which harmed both employers and employees.