Scott Olson/Getty Images captured the moment demonstrators gathered outside of McDonald’s corporate headquarters as part of a nationwide protest calling for a minimum wage increase to $15 per hour.
A recent study by Scioto Analysis reveals that raising Ohio’s minimum wage to $15 an hour may have some drawbacks, but it could also save as many as 4,000 lives and generate a whopping $25 billion benefit for the state’s economy by 2036.
Last week, the group that aimed to raise the minimum wage from $10.45 to $12.45 and eventually to $15 failed to submit their petitions for the upcoming November ballot. As a result, the group is now looking to present the proposal to the voters in the year 2025. According to a cost-benefit analysis conducted by Scioto, this increase in the minimum wage would have a positive impact on society by reducing the number of suicides, homicides, infant mortality, and low-birthweight babies – all of which are linked to economic stress.
Upon analyzing the situation, it was found that the proposed increase in Ohio has two potential downsides.
According to recent research, raising the minimum wage could result in the loss of approximately 73,000 jobs, as many employers may perceive the increase as unaffordable. The same research also suggests that around 89,000 individuals in Ohio may not pursue associate’s or bachelor’s degrees, as national statistics indicate that a 4% decrease in college enrollment typically accompanies increases in the minimum wage.
According to the analysis, increasing the minimum wage brings about benefits that far surpass the costs.
According to a recent study, raising Ohio’s minimum wage to $15 per hour could bring a net benefit to society ranging from $5 to $45 billion over the next decade. On average, the expected net benefit is estimated to be around $25 billion. The study highlights that the minimum wage increase could result in saved lives, with approximately 4,000 suicides, firearm homicides, and infant deaths avoided between 2027 and 2036.
Let’s delve into the rationale behind the benefits that were estimated in the analysis.
In a recent study conducted in 2020, it was found that there is a significant correlation between the increase in minimum wage and a decrease in the suicide rate among adults with a high school education or less. The study showed that for every $1 increase in the minimum wage, there was a corresponding 3.4% to 5.9% decrease in the suicide rate. This information was used to determine the economic value of preventing suicides in Ohio. Taking into account the Federal Emergency Management Agency’s estimation of $9 million value to the economy for a single life, it was concluded that preventing suicides would be worth $14 billion over a 10-year period in Ohio.
According to a study conducted by Johns Hopkins University, gun violence is linked to economic insecurity. The study also found that for every 1% increase in the minimum wage relative to the state median income, there was a corresponding 1.3% decrease in firearm homicide rates. With an estimated 820 homicides occurring in Ohio annually, the proposed minimum wage increase in the state is expected to save around 1,500 lives over the next ten years. This increase would generate a benefit of $13 billion over the same period, based on Ohio’s proposed wage hike.
According to a study published in the Journal of the American Medical Association, increasing the minimum wage by $1 can lead to a 4% reduction in infant mortality rates. The study suggests that if this increase was implemented in Ohio, it could potentially save the lives of over 1,000 infants over the next ten years, with 600 children between 28 and 364 days old dying in the state in 2021 alone. This analysis estimates that the potential benefit of such an increase could be as high as $9.1 billion.