Could a $15 minimum wage make sense for Oregon?
A new bill in the Oregon House of Representatives aims to raise the state minimum wage by increments over three years, until it reaches $15 in 2018. State lawmakers and the public are divided about the economic costs and benefits of such a hike, reflecting the larger nationwide debate about minimum wage increases.
Oregon may be upping its wage game – literally.
The bill, one of six introduced by state lawmakers into both the House of Representatives and the Senate, represents a leading charge in the nationwide movement for minimum wage hikes – a union-backed effort to support the country’s bottom-rung employees. The debate in Oregon also reflects a larger conversation about the economic costs and benefits of raising the minimum wage.
Oregon’s minimum wage is currently $9.25 an hour, the second-highest in the nation after Washington state’s $9.47. Portland, Ore. enacted a $15 minimum wage in February.
"I believe that Oregonians who work full time and play by the rules shouldn't be living in poverty and that these hardworking Oregonians, many of whom are parents trying to support a family, deserve a raise," Rep. Nosse told KGW News in an email.
"This would benefit the economy around the state by giving Oregonians more money to spend at local businesses, from restaurants to child care,” he added.
Nosse’s remarks echo those of wage-hike advocates across the nation, who say that the change would ensure that holding a job means earning a “living wage,” The Christian Science Monitor reported early this year. The Monitor's Mark Trumbull wrote:
“As living costs have risen, in areas ranging from food and shelter to health care and education, pay has stagnated for many US workers in recent years."
The argument is that low-wage workers cost taxpayers millions every year in public assistance. The fast food industry alone sets taxpayers back by $7 billion per year, according to a joint study sponsored by the University of California-Berkeley Labor Center and the University of Illinois at Urbana-Champaign.
Similarly, in Oregon, “taxpayers subsidize corporations’ reliance on a low-wage workforce to the tune of $1.7 billion a year,” according to a University of Oregon Labor Education and Research Center report.
A wage increase would improve workers’ morale, reduce employee turnover rates, and allow workers to support their families, all with minimal impact on the cost of goods and services, hiring costs, or workers’ hours and benefits, according to the report.
Opponents, however, have argued that a wage hike hurts the people it intends to help. Companies would be forced to raise not only the wages of their entry-level employees, but also of more skilled workers.
"If I have to pay my host $15, my kitchen is going to want $18 or $20," one Salem, Ore. restaurant owner told KGW News. “I can’t pay that. … I bring in a host right out of high school with no skills, and I bring her in at the same wage as someone who's been working for four years and earned that?"
The hike could impact small businesses, making it almost impossible for them to hire employees, or, in fact, make a profit, according to one report by the San Francisco Chronicle. (San Francisco has an $11.05 minimum wage, the highest of any city in the nation.)
So what’s the answer? Many economists, including Federal Reserve Chair Janet Yellen, support a modest wage increase, as the benefits for low-paid workers could offset the costs of slower job growth.
In the meantime, it seems the wage-hike movement continues to gain momentum: 20 states, including Oregon, raised their minimum wage on Jan. 1 this year.
As of Friday, Oregon’s latest bill remained in the House with no public hearings scheduled. But Washington state’s House last week sent to the Senate a bill that would raise the state’s minimum wage to $12 over four years, and the Illinois Senate in February voted to raise the minimum to $11 an hour by 2019.