Ohio’s minimum wage workers received a raise at the beginning of 2024, as the state’s new minimum wage increased to $10.45 per hour for non-tipped employees and $5.25 per hour for tipped workers. This was the result of a constitutional amendment passed in 2006 that tied the minimum wage to inflation. However, not everyone was happy with the wage hike, especially in the health care sector, where many employers faced financial difficulties and had to lay off workers or reduce their hours.
The Impact of the Minimum Wage Increase on Health Care Employers
According to the Ohio Health Care Association (OHCA), which represents more than 1,000 long-term care facilities in the state, the minimum wage increase added an estimated $100 million in annual labor costs to the industry.
The OHCA said that many of its members were already struggling to cope with the effects of the COVID-19 pandemic, which reduced occupancy rates, increased infection control expenses, and caused staff shortages. The OHCA also claimed that the state’s Medicaid reimbursement rates were inadequate to cover the rising costs of care, and that the federal relief funds were insufficient and temporary.
As a result, many health care employers had to make tough decisions to balance their budgets, such as laying off workers, cutting hours, freezing wages, reducing benefits, or closing facilities. According to a survey conducted by the OHCA in December 2023, 62% of its members said they planned to reduce staff in 2024, 58% said they planned to reduce hours, and 54% said they planned to freeze wages. Some of the workers affected by these measures included nurses, nursing assistants, dietary aides, housekeepers, and laundry workers.
The Impact of the Minimum Wage Increase on Health Care Workers
The minimum wage increase was supposed to benefit low-wage workers, but for many health care workers, it had the opposite effect. Instead of earning more money, they lost their jobs, had their hours reduced, or saw their wages frozen . This had a negative impact on their income, health, and well-being.
For example, Mary Jones, a nursing assistant at a nursing home in Columbus, was laid off in January 2024, after working there for six years. She said she was earning $11.50 per hour before the minimum wage increase, but she was not eligible for unemployment benefits because she had not worked enough hours in the previous year due to the pandemic. She said she had no savings and was struggling to pay her rent and bills.
Another example was John Smith, a dietary aide at a hospice in Cleveland, who had his hours cut from 40 to 32 per week in February 2024. He said he was earning $10.75 per hour before the minimum wage increase, but he did not receive a raise because his employer froze wages for all workers. He said he had to rely on food stamps and Medicaid to make ends meet, and that he was worried about his health insurance coverage.
Conclusion
The minimum wage increase in Ohio was intended to help low-wage workers, but it had unintended consequences for the health care sector, which was already facing financial challenges due to the pandemic. Many health care employers had to lay off workers, cut hours, freeze wages, or close facilities to cope with the increased labor costs, while the state and federal governments did not provide adequate funding or support. Many health care workers, who were essential during the pandemic, lost their jobs, income, and benefits, and faced hardship and uncertainty. The minimum wage hike, instead of improving the lives of workers, worsened the situation for many in the health care industry.