The Columbus Dispatch, July 1
That the Ohio Chamber of Commerce Research Foundation wants to see the “benefit cliff” addressed is commendable. They’re right that low-income workers trying to build better lives shouldn’t have to turn down a raise or a promotion because it would cause them to lose their food stamps or Medicaid and actually be poorer than before.
But the foundation’s recent report on the matter doesn’t address an obvious element of what it calls “the workforce puzzle”: Those struggling workers depend on public assistance only because their employers pay them so little. Should taxpayers have to make up the difference between what they pay and a living wage?
The question is especially worth asking for companies that already are directly subsidized by taxpayers in the form of tax incentives. A poster child for corporate-welfare double-dipping is Amazon, which has taken more than $17 million in incentives for two distribution centers in central Ohio and also was 19th-highest on a 2018 list of major companies with employees qualifying for public assistance.
The puzzle the report refers to is the difficulty many companies have in finding and keeping good employees. The chamber foundation maintains that some low-paid employees turn down raises or quit rather than lose their public benefits. Today’s low unemployment makes the problem worse.
The foundation suggests that lawmakers should do something about the benefit cliff and that solutions should involve businesses working with local and state governments.
That no doubt would be helpful to those workers and their employers, but the answer to low wages can’t be ever-rising levels of public assistance.
Stubbornly low wages have been worrying central Ohio leaders for years. In 2014, 200 people gathered at the Columbus Public Health Department to try to figure out why unemployment was declining but poverty wasn’t.
In 2015, a report by the liberal advocacy group Policy Matters Ohio noted that Ohio’s average hourly wage, then $16.05, was $1.25 below the peak years of 2006, 2000 and 1979 when adjusted for inflation and had dipped below the national average.
Of course, adjusting eligibility levels for public benefits could be part of the solution. Policymakers should consider creating or increasing the number of eligibility tiers, so that assistance shrinks more gradually as income rises instead of falling off the current steep cliffs.
But more public assistance shouldn’t be the default solution. The fact that so many working Ohioans are poor says that raising wages must be a top economic-development policy.
The city of Columbus requirement that companies receiving tax incentives pay workers at least $15 per hour is a good start. But other income-suppressing trends, such as the increased use of benefit-lacking part-time, temporary and contract workers, can make an official $15 minimum less meaningful. Those trends must be addressed as well.
We also have to focus on getting more workers the training and skills they need for the jobs that are available. That, too, is a responsibility that shouldn’t fall only on the public; employers can step up.
Employers want workers who can stay in their jobs and be dependable — whose lives aren’t likely to be upended by eviction or a medical crisis or lack of a babysitter. That stability makes for healthier individuals and communities, too.
Employers can help make that possible by building higher wages and benefits into their business plans.