Category Archives: Economics – Why Raise the Minimum Wage

Big minimum-wage hikes are nothing new in Oregon

by Mark Vorpahl (originally published by The Oregonian)

The headline of Garrison Cox’s Nov. 28 guest column may proclaim “‘Fight for Fifteen’ movement has its math wrong”, but his incomplete research and unsubstantiated conclusions fail to add up.

For instance, the article claims “…there is no research that recommends a $15 minimum wage.” What of economic research heavyweights like former Labor Secretary Robert Reich’s article “Why the minimum wage should really be raised to $15 an hour,” or the Oregon Center for Public Policy’s “$15 minimum wage means real gains for workers”?

Unfortunately, it seems Cox slacked off with his homework by ignoring Oregon’s own history of large minimum wage hikes. Otherwise his worries about $15 being too “drastic” would likely be calmed.

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The economic case for a $15 minimum wage is good

By Mary King

This article was originally published by The Oregonian on 12/12/2015.

Contrary to claims in a recent Oregonian/OregonLive guest column, the economic case for a shift to a $15 minimum wage over the next few years is based on very solid mathematical analyses by the best labor economists in the field. Their work predicts higher economic growth and therefore more tax revenue; lower business costs for turnover, recruitment and training; greater labor productivity and job satisfaction; lower poverty rates, particularly among single parents and young families; lower public expenditures for food stamps and other benefits; and a counter-force against spiraling income inequality in our state and nation.

The strength of the economic case for a substantially higher minimum wage surprises people who:  Continue Reading…

PSU Student Union, 15 Now Activists “Mic Check” Televised Minimum Wage Debate

Last night KATU and Portland State University held a debate and town hall on raising Oregon’s minimum wage. The need for a $15 minimum wage in Oregon dominated the evenings questions and discussion, which was often tense and heated. The audience clearly favored a $15 minimum wage, and was not shy about letting the opposition know they weren’t buying the doomsday arguments.

Olivia_TeresaMembers of 15 Now PDX and the Portland State University Student Union (PSUSU) turned out to the event in force. About three quarters of the way into the debate, Olivia Pace from PSUSU challenged Jeff Stone, Executive Director and CEO of the Oregon Association of Nurseries, on his assertion that President FDR never intended the minimum wage to be a living wage. Olivia then went on to challenge the assertion of Dr. Tom Potiowsky, chair of PSU’s Economics Department and former Oregon state economist, that poverty could be ended simply by ending discrimination.

Click here to see Olivia Pace of PSUSU challenge the debaters

After Olivia finished her exchange with Dr. Potiowsky, students and 15 Now activists temporarily disrupted the event with a mic check, explaining that the University wastes millions of dollars while refusing to pay low-wage workers on campus a $15 per hour wage, and highlighting groups of workers on campus that make less than $15.

Click here to see video of the mic check

debate2When the mic check ended the debate resumed as normal. At the end of the televised portion of the event, Ramon Ramirez, president of PCUN, Oregon’s farmworkers union, got a chance to tell the story of six farmworkers who were standing there next to him. They pick hundreds of thousands of dollars worth of high end shiitake mushrooms, make minimum wage, and got fired this past Sunday for asking for a 20 cent per hour raise.

Unfortunately, the whole story did not get to be told on air. The moderator of the event cut Ramon off to end the live broadcast. ThisDebate1 upset many members of the audience, who called out for the moderator to let Ramon finish his story. When the moderator insisted, members of the audience, led by students, erupted into a chant of “15 Now” that took over the last 15 seconds of the live broadcast.

Here is the entire broadcast in full:

New Seasons and Other Businesses Push for Higher Minimum Wage

New Seasons Market announced that it will raise the minimum starting wage at all of its stores to $12 per hour in January 2016, a $2 increase from their current base pay of $10 per hour. ¿Por Qué No? Taqueria in Portland also announced that they are raising their minimum wage to $12.50 in January 2016, and will increase that to $15 by 2021.

According to a press release sent out yesterday, New Seasons is working with a number of other businesses to call “for state elected leaders to take action in 2016 on a minimum wage policy that meets the needs of Oregon’s diverse communities.” Among those other businesses are Grand Central Bakery, HOTLIPS Pizza, Looptworks, Neil Kelly, ¿Por Qué No?, The Joinery, Better World Club, Morel Ink, Chef’s Table, FMYI, and Grain & Gristle.

New Season’s CEO Wendy Collie stated, “The wage that supports self-sufficiency in urban areas such as Portland could be $15 per hour, while the differences in cost of living in rural communities could make the same wage unsustainable.”

We applaud New Seasons and these other businesses for committing to raising wages, for actively supporting the work to change state policy on the minimum wage, and for recognizing the need for $15 in Portland.  However, while we agree that Oregon communities are diverse in terms of cost of living, we wish to emphasize that $15 is not just what is needed in Portland, but rather what is need throughout our entire state.

Continue reading New Seasons and Other Businesses Push for Higher Minimum Wage

New Portland Restaurants Prove Paying $15 Doesn’t Have to mean Higher Prices

During a recent conversation about the cost of living in Oregon and raising the minimum wage, a representative from an Oregon business lobby asserted that a $15 minimum wage won’t make any difference. After all prices will simply go up across the board, wiping out any newfound buying power that low-wage workers might have thought they would have. It’s a forgone conclusion!

As an example he used Ivar’s Seafood Bar, a Seattle-area restaurant chain that started paying $15 per hour ahead of the scheduled phase in period that will last for the next 6 years. It also eliminated the social obligation to tip by increasing prices by about 20% and distributing that among the employees.

So yes, Ivar’s did raise its prices, but it raised its prices by the amount one would tip, as an alternative to socially obligated tipping. You’re paying about the same as if you would have tipped, and the workers are still getting a share of that price increase, as they would if it were a tip. The price increase was about the elimination of socially obligated tipping, not about compensating for the increase in the workers’ base pay to $15 per hour.

But aside from the clearly flawed example used by the business lobbyist, we’d like to point out the absurdity of the assumption that raising the minimum wage to $15 necessitates price increases.

Continue reading New Portland Restaurants Prove Paying $15 Doesn’t Have to mean Higher Prices

Repeal Oregon’s Anti-Worker Minimum Wage Preemption Law

In the past year Seattle, San Francisco, and Los Angeles have passed $15  minimum wage laws. Some smaller cities have raised their minimum wage even higher. Unfortunately, cities in Oregon and number of other states such as Pennsylvania, Oklahoma, and New York don’t have the right to raise their own minimum wage above the level set by their state governments.

A minimum wage preemption law is basically a law that says only the state can set minimum wage rates. In states like Oregon that have these preemption laws cities, counties and other local governments aren’t allowed to set their own minimum wages. So right now, despite the fact that raising the minimum wage to $15 is massively popular in Portland, this preemption law prevents us from raising the minimum wage here in our city.

The American Legislative Exchange Council (ALEC), which is responsible for some of the nation’s worst legislative attacks on labor and the environment, has been systematically pushing for statewide minimum wage preemption laws for over a decade. In fact, ALEC even has it’s own Living Wage Mandate Preemption Act that state’s can use to save anti-worker legislators the time of having to write their own bills.

Continue reading Repeal Oregon’s Anti-Worker Minimum Wage Preemption Law

There’s Oregon Precedent for a Big Minimum Wage Increase

by Chuck Sheketoff

If the Oregon legislature raises the minimum wage to $15 per hour by 2018 in three steps, as proposed by HB 2009, it would not be the first time lawmakers enact a substantial minimum wage increase.

In 1989, Oregon lawmakers raised the minimum wage, which then stood at $3.35. The result: By January 1, 1991, Oregon’s minimum wage was $4.75. That’s a 42 percent increase over two years. Oregon’s economy did well following the increase. That’s not to suggest causality, but rather to note that a substantial minimum wage increase can go hand-in-hand with solid economic growth.

In 1950, the federal minimum wage — which set the floor in Oregon at the time — jumped 88 percent, thanks to congressional action.

How do these historical increases from Congress and the Oregon legislature compare to the increase proposed in House Bill 2009?

OCPPimage

 

Over the first two years of implementing HB 2009’s phased increase, the minimum wage would rise 43 percent. When fully implemented on January 1, 2018, Oregon’s minimum wage would be 62 percent higher than it is today.

Too many working Oregonians are struggling to make ends meet. There’s precedent to raise the minimum wage to $15 by 2018.


This post was originally published on Blue Oregon on February 20, 2015. 

Great Progress for Oregon Workers: Who Would be Affected by Raising the State Minimum Wage to $15 by 2018?

)Compiled and first published by the Oregon Center for Public Policy)

Raising Oregon’s minimum wage to $15 per hour by 2018, a proposal currently before the legislature, would constitute great progress for Oregon working families.[1]

Here are preliminary estimates of the impact of the proposed raise:[2]

Number of workers helped: By 2018, about 589,000 workers would likely see their wages rise directly as a result of the increase.[3] At the same time, another 114,000 workers earning above $15 would also likely see their wages increase indirectly as employers adjust overall pay ladders.

Total wages gains: As a group, workers benefiting directly and indirectly[4] from the increase would gain about $3.2 billion in additional wages during the three-year implementation period.

Workers’ gains: The gains of particular workers due to raising the minimum wage to $15 per hour would depend, of course, on their current hourly wage and number of hours worked. At the high end of the range, Oregonians currently earning the minimum wage of $9.25 and working 35 hours per week would gain $10,465 in yearly income, or $872 per month, assuming their work hours stay the same.[5]

Families with children helped: About a third of all workers directly benefiting from the increase have children. Among all single-parent workers in the state, almost half (47 percent) would experience wage gains directly as a result of the minimum wage increase.

Age of workers helped: Among workers directly affected by the increase, about 93 percent would be 20 years or older. About three-quarters (74 percent) would be 25 years of age or older. About two out of five (39 percent) would be 40 years of age or older.

Gender of workers helped: Among workers directly affected by the increase, about 53 percent would be women and 47 percent would be men.

Full-time workers helped: About 61 percent of workers who would gain a raise would be full-time workers, defined as 35 hours or more worked per week. Another 30 percent of those helped would be Oregonians working between 20 and 34 hours per week.

College-educated helped: Among those directly affected by the increase, about 55 percent would have at least some college education. About 16 percent would have a college degree or higher.

[1] HB 2009 would raise Oregon’s minimum wage from the current $9.25 to $15 hour in three steps: $11.50 in 2016, $13.25 in 2017, and $15 in 2018.

[2] Unless otherwise noted, these estimates come from analysis by the Economic Policy Institute of Current Population Survey, Outgoing Rotation Group public use microdata, 2013Q4-2014Q3.

[3] Directly affected workers would see their wages rise because the new minimum wage rate would exceed their current hourly pay.

[4] Indirectly affected workers are those whose wages are not far above the proposed new minimum wage. They would receive a raise as employer s adjust pay scales upward in response to the new minimum wage.

[5] OCPP analysis.

A $15 Minimum Wage Solves the Benefits Cliff Problem in Oregon

by Justin Norton-Kertson

The Oregonian’s recent article shed’s strange light on the Legislative Revenue Office (LRO) analysis of the effects of a minimum wage increase and the “benefits cliff.” The analysis looks at a single parent with two children who gets a childcare tax subsidy. It states that while at a $12 or $13 minimum wage these families fall off the benefits cliff (meaning they actually end up losing money each month after accounting for the public benefits they will lose as a result of having a higher income), a $15 minimum wage leaves these families with about $50 per month extra after accounting for the public assistance benefits lose.

The Oregonian’s article come with a massive, super-sized font headline about ONLY having $49 extra with $15 minimum wage, as if this is a reason to leave the minimum wage in Oregon at a poverty level. The article focuses entirely on the grossly hyperbolized notion that if the minimum wage goes up people will actually lose money.

The article misses the real point entirely, it fails to come to the glaringly obvious conclusion that a $15 minimum actually solves the benefits cliff problem. It puts people on top of the cliff, while anything less leaves families falling off the cliff. With a $15 minimum wage working people in Oregon will have the dignity of being able to provide adequate housing, food, and health insurance for their families without having to rely on taxpayers for assistance. It even leaves these families with a little left over at the end of the month. This is important, because working people deserve dignity. No one who works should live in poverty.

The University of Oregon’s Labor Education and Research Center (LERC) just released a report addressing this exactly issue of Oregonians on public assistance. The report shows that taxpayers in Oregon spend over $1.7 billion per year to subsidize the poverty wages of massively profitable corporations by paying for the public assistance that goes to those corporations’ low-wage workers. Raising the minimum wage to $15/hr will reduce the amount that taxpayers are spending to corporate low wages. We can then use that freed up money to fund public education, or provide affordable housing, or help fund single payer healthcare for all Oregonians.

The LERC report also found that 400,000 workers in our state currently work in low-wage jobs, and that 197,000 of them received public assistance. That means that there are hundreds of thousands of working Oregonians who make less than $15/hr and DID NOT receive public assistance. They would benefit directly from an increase in wages. For these workers the benefits cliff does not exist. They will have much more than $49 extra at the end of the month when we increase the minimum wage $15/hr. 

What the LRO report shows is that $15 is the right number for Oregon’s minimum wage. Families can’t survive on $9.25. A $12 or $13 minimum wage is still a poverty wage here in our state, and would leave families falling off the benefits cliff. Only a $15 minimum wage is enough to prevent families from falling off the cliff while giving working Oregonians the dignity of earning a wage that allows them to provide for their families. Oregon needs a raise. Oregon needs $15 Now.

Help us win $15 for Oregon by donating to the campaign or becoming a volunteer!