Ohio’s minimum wage will increase to $10.70 an hour for 2025 following an adjustment for inflation on the first of the year.
The adjustment, perthe Ohio Department of Commerce, is a 25-cent increase from the state’s 2024 minimum wage of $10.45. It’s brought on by a 2.4% increase in the Consumer Price Index, used to measure inflation, that Americans saw throughout most of 2024.
As always, tipped workers will have a pay rate that is half that of non-tipped minimum wage employees, calculating $5.35 per hour.
For employees at smaller companies with annual gross receipts of $394,000 or less per year after Jan. 1, 2025 — and for 14- and 15-year-olds — the state’s minimum wage is $7.25 per hour, according to the state commerce department.
“For these employees, the state wage is tied to the federal minimum wage of $7.25 per hour, which requires an act of Congress and the president’s signature to change,” says a release from the Ohio Department of Commerce.
Smallest in years
Ohio has been constitutionally required to adjust its minimum wage with inflation since voters approved a 2006 constitutional amendment to initially raise the floor wage to $6.85 starting in 2007 and match annual adjustments to the inflation rates seen from Sept. 1 of the preceding year to August 31 of the current year.
The 25-cent increase from 2023 to 2024 is the lowest rise Ohio has seen since American inflation rates began to soar in 2021.
- In 2022, an inflation rate of 5.8% raised the rate 50 cents to $9.30;
- In 2023, an inflation rate of 8.7% raised the rate by 80 cents to $10.10;
- And in 2024, an inflation rate of 3.7% brought the rate up 35 cents to $10.45.
Despite a smaller increase, the Dayton Area Chamber of Commerce — which believes the free market, not policy, ought to determine wages — still expects the wage increase to negatively impact businesses.
“When employers are mandated to raise wages, it impacts the investments they can make with their current workforce and their operations,” chamber President Chris Kershner told this news outlet.
An analysis from Policy Matters Ohio, a left-leaning think tank, found that the adjustment will directly or indirectly benefit nearly 313,000 Ohioans. However, the group lamented that Ohio’s minimum wage, by nature, still offers the same purchasing power it did when it first began in 2007 — falling behind a handful of other states that have increased their minimum wage more than inflation.
“While the adjustments in the minimum wage are critical to mitigating inflation, minimum-wage workers are still only taking home a fraction of what their grandparents did two generations ago,” wrote Ben Stein, communications director with Policy Matters. “If Congress had required inflation adjustments to the federal minimum wage back when it was at its peak in 1968, it would be worth $14.81 today.”
A $15 effort
In the background, there are efforts to pull off another 2006-style minimum wage amendment. This time, a national group called One Fair Wage is canvassing signatures to get a proposed $15 minimum wage, subsequently tied to inflation, on the ballot and voted on by Ohioans.
The group originally planned to put the proposal on the November 2024 ballot but pulled out last minute due to a lack of confidence in their signatures. A spokesperson for the organization told this news outlet in July that they’ll aim for 2025 instead.
The proposal is supported by Policy Matters of Ohio and opposed by commerce and trade groups and the Buckeye Institute, a right-leaning Ohio think tank, which penned an analysis in 2021 that found nearly 116,000 Ohioans would lose their jobs under a mandatory $15 minimum wage.
“If a minimum wage is going to be in place, having a consistent law allows employers to plan to the best of their ability,” Kershner told this outlet.
