Pro-minimum wage hike study draws criticism
A group supporting efforts in the Legislature to hike Oregon’s minimum wage to $15 an hour by 2018 issued a study Wednesday touting the benefits to workers and businesses. But a Central Oregon economic development official took issue with the findings and said the impact is likely to be far more negative than supporters claim.
First, here’s the full release from the Oregon Center for Public Policy:
New Study Shows Oregon Small Businesses Can Thrive With A Higher Minimum Wage
Small business owners, Fair Shot for All Coalition call on Oregon Legislature to give hardworking Oregonians a raise
Portland, Ore. The Oregon Center for Public Policy released todayA Higher Minimum Wage Works for Small Businesses, a new study that shows small businesses in Oregon could benefit from a higher minimum wage. The Oregon legislature is currently considering a number of proposals to increase the minimum wage, includingHouse Bill 2009and Senate Bill 610which would raise the wage to $15 an hour by 2018.
“This study shows that raising the minimum wage can go hand in hand with strong job growth for small businesses,” said Senator Sara Gelser. “With multiple proposals on the table right now, it’s critical that we give real thought at what it will take to make a meaningful difference in the lives of Oregon families.”
Key findings from the report include:
+Experience shows small businesses do fine with higher minimum wages.Oregon raised the minimum wage three times from 1989 to 2002, not counting the annual inflation adjustments that began in 2004. During that time, the small business sector showed mostly uninterrupted growth, with contractions seemingly tied to the business cycle, not to minimum wage increases. Between 1988 and 2007, right before the start of the Great Recession, businesses with fewer than 20 employees grew by more than a third, as did jobs in those businesses.
+Small business jobs paying under $15 account for a small share of all Oregon jobs.There are about 1.9 million jobs in Oregon. There is no universal definition for the term “small business,” though a common definition is businesses that employ fewer than 50 people. Under that definition, there are about 292,000 small business jobs in Oregon that pay less than $15 an hour. That amounts to about 16 percent of all jobs in the state.
+Most workers who would receive a wage increase work at larger businesses.Of all jobs in the state paying under $15 per hour, what share corresponds to larger businesses? The answer is the majority of such jobs—62 percent—assuming that small businesses are those with fewer than 50 employees. Therefore, most workers who would see a wage increase as a result of a $15 per hour minimum wage in Oregon work at a larger business.
+Employers experience productivity gains from a higher minimum wage.Researchers have found that a higher minimum wage yields savings to employers in the form of higher productivity and other efficiencies. Oregon small business owners can expect such benefits from a higher state minimum wage.
Small business owners from across the state have joined proponents in calling on the Oregon Legislature to pass a higher minimum wage.
“Better wages make for more satisfied, more motivated, and overall more productive employees,” said Mark Kellenbeck, Co-owner of BrainJoy in Medford, and Co-Chair of The Main Street Alliance of Oregon. “We have consistently found that better wages both attract and retain superior employees.”
“Investing in our employees sends the message that they are worth a fair wage,” says Deborah Field, Co-owner of Paperjam Press in Portland, and Executive Team member of The Main Street Alliance of Oregon. “A higher wage allows my staff to have a better quality of life and enhances their confidence and pride, all while developing a more robust consumer base.”
“When it comes down to it, we need to ask ourselves what kind of Oregon we want to live in,” voices Sabrina Parsons, Owner of Palo Alto Software in Eugene, and Executive Team member of The Main Street Alliance of Oregon. “I can tell you the kind of Oregon I want to raise my family in—an Oregon that supports investment in our communities, economy-boosting jobs, and creates opportunities for all Oregonians to succeed. That’s why we need to raise the Oregon minimum wage.”
The release of the Small Business Report follows The High Cost of Low Wages in Oregon, a report from the University of Oregon’s Labor Education and Research Center (LERC) released earlier this year, which details the growth of low wage work in Oregon and illuminates the financial crisis that low wage, no benefits jobs have created for working families and Oregon taxpayers.
The LERC report finds that 197,000 Oregonians who received public assistance in January 2014 worked the previous year. And the cost of providing this assistance is breaking the bank—taxpayers provide $1.7 billion each year to subsidize corporations’ reliance on a low-wage workforce.
“Higher wages mean fewer Oregon families living in poverty while working full-time. It’s that simple,” saidAndrea Paluso,Executive Director of Family Forward Oregon and Chair of the Fair Shot For All Coalition. “It’s time for elected officials to give Oregonians a real raise that will enable them to pay their bills and even save a little for the future. If they don’t, too many Oregonians won’t have a path out of poverty, now or in the future.”
Fair Shot For All—a broad coalition of community and labor organizations from across Oregon—has been pushing for real policy solutions that address economic inequality, give a better future for all Oregonians and strengthen Oregon’s economy,including: raising the minimum wage;ensuring all Oregonians earn paid sick days; ending profiling; making saving for retirement easier; and creating opportunities for people with prior convictions and arrests to find work.
Fair Shot for All includes Family Forward Oregon, SEIU, AFSCME, Asian Pacific American Network of Oregon, Basic Rights Oregon, CAUSA, Center for Intercultural Organizing, Oregon AFL-CIO, Oregon Education Association, PCUN, Planned Parenthood Advocates of Oregon, Rural Organizing Project, UFCW, and the Urban League of Portland, Oregon and an ever-growing coalition from across Oregon.
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Asked his views on the report, Roger Lee, executive director of Economic Development for Central Oregon, had this to say:
”Thrive’ ? What a joke. (The) innocuous-sounding Oregon Center for Public Policy … certainly has an agenda.
“With a little digging, I think you will find that about 40% of jobs in our region pay less than $15 hour currently.
(State Regional Economist Damon Runberg confirmed to KTVZ that in 2014, 44% of Deschutes County jobs paid less than $15 an hour, compared to about 40% of Oregon jobs. The countywide figure was pushed up by a high concentration of retail and leisure/ hospitality jobs that are relatively low-paying. He said 64% of retail jobs paid less than $15 an hour, while 73% of leisure and hospitality jobs paid less than $15 an hour.)
Continuing with Lee’s comments: “Also, there is a good body of empirical evidence around how artificial (i.e. government-imposed) increases in wages impact jobs. There is a direct correlation, and it is not what this group is representing. Strength of the economy has fueled job growth in Oregon despite steady increases in minimum wages, not because of them.
“Think about it this example – one of many. Most bank tellers in our region make starting wages of about $10-11/hr. Increase those labor costs overnight by 35-50%, and you will see even more branches close because banks already can’t find a way to pass on those costs to customers.
“Similarly, most small businesses don’t pay high wages. In our experience, they are the most capital constrained class of employers out there. That’s why they are put in long hours.
“In our region, take the restaurant industry. Require employers to pay $15/hr. for unskilled or semi-skilled labor, and just watch those jobs (and businesses) evaporate. Besides, most wait staff make much more than minimum wage, but that additional compensation has not been part of the equation here in Oregon for BOLI (the state Bureau of Labor and Industries).
“The group hardest hit by politicians setting wages for employers is our kids – the emerging workforce. We already have the lowest employment participation rate from 17-24 year-olds today since they have been tracking those figures since the 1960s. And it continues to go down….
“Who’s going to hire a high school student without any work experience for $15/hr that delivers $8/hr value. NOBODY! Expect to see our labor participation rates from the emerging workforce to plummet further.
“To be clear, EDCO works to grow our region’s employment base with jobs that start in the $35,000-$40,000 range. The average of jobs created by companies we’ve recruited here, helped grow or start operations is above $50,000.
“But these are not legislated wages, they are determined by the type of work that is being done and the value being created. You don’t create economic value by just legislating huge wage increases. Huge wage increases lead to inflation, which we believe is exactly the endgame for the “Oregon Center for Public Policy.” Wage inflation is justification for the wage increases that is the cornerstone of unions’ value proposition to their members,” Lee concluded.
