Workers in Ohio saw wages rise in 2023 but an annual economic report from the progressive think tank Policy Matters Ohio said it is still rigged in favor of the already wealthy.
The State of Working Ohio found wages in 2023 increased more than they had in decades throughout the state. Some of the lowest-paid employees saw gains. But the highest gains were seen by people already making more than 80% of Ohioans. While wages grew, it wasn't enough for many and didn't erase inequities.
White men still make more than Black workers and women.
Black people in Ohio also face high unemployment numbers. At the end of 2023, Black worker unemployment was 5.8%, nearly three percentage points higher than that of white workers. And, this year, Black worker unemployment reached 9.1%, while it's at 4.5% for the state as a whole.
"This is likely another example of how Black workers are typically hit earliest and hardest by policy choices that sacrifice jobs to slow inflation," the report states. "Policymakers need a more nuanced set of tools to ensure that those who cause inflation cover the costs of slowing it. Though inflation has created a hardship for many Ohioans in recent years, it is still vital to recognize the harm of unemployment and prioritize keeping it low.
The report argues that corporate profiteering has been driving inflation.
"Though far smaller than the 1970’s price surges, recent inflation is bad enough that most Ohioans are still feeling a pinch — some more than others," the report states.
Grocery prices were up more than 20% over 2021 prices.
The report also concluded people who make less money face a "higher effective rate of inflation," which "accounts for the fact that not everybody has an average budget."
"Ohioans who have little or no discretionary income must spend a larger share or even all their money on necessities like food — the prices of which rose faster than the general rate of inflation," the report states.
Wage increases have mitigated some of the price hikes. But the report argues companies marked up prices, not to make up for labor and other costs, but to generate profit.
"From 1979 to 2019, profits contributed only about 11% to price growth and labor 62%. Through the end of 2021, the period of greatest price acceleration, profits contributed well over half of the entire increase in prices and grew to 83% by the 3rd quarter of 2023," the report states.
The economy withstood several shocks, like COVID, and the Russian war on Ukraine, which created "quickly changing consumption patterns and major supply chain disruptions across sectors," the report states. And "these shocks created conditions for some corporate interests to take advantage of their outsized pricing power."
The report states the price of a product includes three parts — labor, non-labor inputs, such as equipment and energy, and the mark-up, which is "any amount added on top of the first two components to generate a profit."
Josh Bivens, senior economist with the Economic Policy Institute in Washington D.C., said the cost of labor wasn't the primary driver of costs — shipping capacity and other nonlabor shortages were. So, firms that did happen to have supply on hand, had "enormous pricing power" over their customers.
And, even as inflation slows to a more normal rate, high prices remain.
"Prices are now rising at a normal pace — 2.9%, but prices remain high because current inflation compounds on top of the inflation surge that peaked at 9% in 2022," the report states.
The report found union jobs paid 16% more than non-union jobs at the median level.
"The median wage of a worker covered by a collective bargaining agreement in 2023 was $26.80 per hour. The median wage for workers not covered by a union was $23.06 per hour," the report states.
