Oregon Gov. Brown proposes two-tier minimum wage hikes

Amid proposals by lawmakers and others who seek a statewide vote, Oregon Gov. Kate Brown announced Thursday her proposal to increase the minimum wage statewide, to a higher level in the Portland area than elsewhere.

Brown said her proposal was developed after conversations with stakeholders in both the public and private sectors.

“Their input was essential to finding Oregon’s path forward to a higher minimum wage,” her announcement said. The plan will be brought for debate during the 2016 legislative session next month.

“The costs of essentials such as food, child care, and rent are rising so fast that wages can’t keep up,” Brown said. “Many Oregonians working full-time can’t make ends meet, and that’s not right.”

Recognizing that Oregon businesses need certainty and time to plan, the proposal calls for a two-tiered minimum wage that increases gradually over the next six years, starting in 2017.

Brown said her proposal “establishes a higher minimum wage in the Portland metropolitan area, where the economy is growing faster and has traditionally been stronger than in the rest of the state.”

Outside of the Portland Urban Growth Boundary, the wage would be raised to $10.25 in 2017 and increase to $13.50 by 2022. Within Portland’s UGB, the wage would be set at 15 percent above the statewide minimum wage, increasing to $15.52 by 2022.

Oregon’s minimum wage is $9.25 an hour, $2 more than the national minimum.

After 2022, the minimum wage will return to the current rate of increase, in conjunction with the Consumer Price Index.

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Oregon House Speaker Tina Kotek released the following statement on the governor’s proposal:

“Today, Governor Brown released a plan for a minimum wage increase that forges a middle ground based on input from both sides of this issue, and I appreciate her leadership.

“Her plan recognizes that the economic reality in the Portland-metro area, where the cost of living is high and rising fast, is different from many communities across the state. The plan also addresses the business need for a predictable phase-in.

“Oregon should be a state where if you work full-time, you don’t live in poverty. The Governor’s proposal would take a significant step forward in meeting that goal. While I personally would support getting to a higher minimum wage faster, many families will be helped by this proposal.

“I can support this proposal because I believe the legislature has an opportunity help thousands of Oregonians by taking action on this important issue in 2016.”

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The Raise the Wage Coalition issued this reaction from coalition members Andrea Miller, executive director of Causa, and Tom Chamberlain, president of Oregon AFL-CIO:

“Last summer, labor and community groups launched the Raise the Wage campaign around a single, fundamental principle: that regardless of where they work, every Oregonian should be paid a wage that allows them to afford the basics. No one who works full-time should be forced to live in poverty.

We remain hopeful that legislators will enact a solution in the February session that meets this core principle—and today’s leadership by the governor is a good sign that our elected leaders are serious about working to achieve that goal.

But before we take a position on the specific proposal unveiled today, we need to look closely at whether or not it will have the impact that low-wage workers are waiting for. A quick review shows that it has some positive elements—like a higher wage for some high-cost areas—but it does not include lifting pre-emption and it lengthens the timeframe significantly, which is a concern.

The key question that we will use to evaluate any proposal that comes forward this session is: will it give half-a-million minimum wage workers across our state the real opportunity to support themselves and their families?

As we work with legislators and workers alike to answer that question in the coming days, we will continue to gather signatures for Initiative Petition 58. Our ballot measure increases Oregon’s minimum wage to $13.50 by 2018 and allows local governments to set a higher wage—and we know it meets the principles that we stand for.

The bottom line is that half a million Oregonians are waiting for a raise, and it’s time to make that happen in 2016.”

The proposal is also the topic of our new KTVZ.COM Poll, which you can find halfway down the right side of our home page.

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A news release from the Oregon Restaurant and Lodging Association:

Wilsonville, OR] – With Governor Kate Brown’s release today of a proposed dual-region minimum wage increase plan, Oregon Restaurant & Lodging Association (ORLA) is very concerned over the significant likelihood of job losses and economic instability for small businesses throughout the state. The graduated rate increase proposal, which would take effect January 2017 and top out at $15.52 for Portland and $13.50 for the rest of the state, does not include a tip credit provision that 43 other states use to calculate wages for tipped employees.

“The Governor’s proposal without inclusion of a tip credit will result in tens of thousands of job losses in our great state,” said Jason Brandt, President & CEO of ORLA. “At $13.50, it is estimated that Oregon job losses will total 55,000 according to Economics International1, a consulting firm based in Portland specializing in economics and finance, as a result of this flawed policy.” Brandt goes on to say, “That equates to a reduction in wages and salaries of $6.2 billion which will have significant impacts on Oregon’s income tax revenues.”

The comprehensive study confirms that reduced employment rates increase poverty in the state. While it is clear that Governor Brown is trying to improve the well being of Oregonians facing tough times, this proposal will not solve the challenges of poverty.

“With an additional 55,000 Oregonians out of work due to this faulty proposal, the very people our Governor intends to help won’t have enough money for food, child care, and rent because they won’t have jobs. For those that do have jobs at the newly established rate, they will experience increased prices for all of these essentials,” added Brandt.

ORLA has proposed a tip credit at the current minimum wage rate of $9.25, meaning that any minimum wage increase at $13.50 or $15 would result in restaurant and lodging workers making the new minimum wage rate through a combination of hourly pay and tip income.

If Oregon lawmakers pass a $13.50 minimum wage without a tip credit, it will mark a sad day for Oregonians who need jobs the most. The Governor’s proposal is far from a solution. The solution is more jobs for Oregonians, not job cuts.