Oregon’s minimum wage will increase by a dime on Jan. 1, 2011. The weeping and wailing from Oregon businesses, conservative politicians and right-wing think tanks will commence well before then.
Eight years ago Oregon voters approved Measure 25, which provided that the state minimum wage must be adjusted annually for inflation. Because prices were virtually flat in 2008, the minimum stayed at $8.40 an hour through 2009. But there’s been a 1.15% increase in the Consumer Price Index since August, so the minimum will rise to $8.50 in 2011.
A 10-cent raise will not drive employers into poverty. It adds up to only $4 per week or $208 per year – assuming a 40-hour week and 52 weeks of employment a year, which many minimum-wage workers don’t get.
But a 10-cent raise could make life a little more livable for the minimum-wage worker who gets it. Four bucks a week can pay for a couple of gallons of gas or a couple more quarts of milk. It could make the difference between being able to pay the electric bill and having the lights turned off.
From the standpoint of boosting Oregon’s economy, raising the minimum wage is a winning proposition. The state’s 121,000 minimum-wage workers are not going to be socking their extra $208 a year away in offshore bank accounts or buying Italian sports cars and tailor-made Savile Row suits. They’ll be spending it right here in Oregon, helping to support businesses in their own communities.
For those who belong to the Trickle-Down School of Economics, of course, a higher minimum wage – in fact, any minimum wage at all – is poison. It supposedly forces businesses to lay off workers or refrain from hiring more workers, thus driving unemployment up. For instance, Republican governor candidate Chris Dudley, while not specifically attacking the coming 10-cent increase, said at a campaign appearance that “having the highest minimum wage in the country negatively impacts the state” and expressed support for allowing a “training wage” – a sub-minimum wage for workers who supposedly are “in training.”
Aside from getting a basic fact wrong (Oregon’s minimum wage is the second-highest, behind Washington’s) the trouble with Dudley’s way of thinking is there’s little empirical evidence that raising the minimum wage actually causes job losses. In fact, some studies of the federal minimum wage indicate that raising it has led to job gains, due to the “trickle-up” effect of putting more money in the pockets of people who will spend it.
And those who believe a high minimum wage hurts a state’s economy might want to explain why the five states with no state minimum at all – Tennessee, South Carolina, Mississippi, Alabama and Louisiana – are chronically among the poorest in the country.
Nothing we can say here is going to change the minds of those who are dogmatically opposed to the minimum wage. But we’re tired of hearing them whining and predicting economic ruin every time a modest increase in the minimum goes through, so we’re giving them THE BOOT for our own personal satisfaction.
This article appears in Sep 23-29, 2010.
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Well, I’d like to proof-read this letter, but I don’t have time. However, since you opened the door to petty name calling, I’ll finish by giving the Boot to the source’s regurgitation of knee-jerk liberal tropes that appear to be based on trust fund baby guilt rather than an awareness of economic realities. Measure 25 kills small business owners. Just ask Mike West (RIP), one time owner of The Bend Fish Company. Blindly raising the minimum wage every year to reflect the rise in inflation causes prices to go up, and hours to go down, at least when it comes to small businesses. It’s empirically obvious. Sincerely, JV Fuentes, small business slave. (Thanks for the “cult like following” tag. I'm sure my customers appreciated that.)
It’s true that these wage hikes have little effect on the larger mega-corps like Wal-mart and Costco, who can easily raise prices to cover the jump, as common folks have less and less small business options to turn to. But small restaurant owners like me are getting murdered. Ask the one-time owners of places like Bluefish, Merenda, Deep, Ernesto’s, Leonardo’s, The Downtowner, Hans, Cork, Bella Cucina, Volo, or that italian place that briefly operated where Amalia’s is now located. What was their name? I can’t even remember. Ask the owner of the Phoenix where he would be if he hadn’t found a big-money investor. Ask Gavin McMicheals. Hell, not even Subway could survive. My prediction is that in 10 years we’ll all be eating at the Costco food court, or at McDonald's, or maybe, during the summer months, at the food carts, which will have lost their quaint charm when they become the only option.
Well, it’s been more than a year since the source printed this piece of drivel, and it’s been sticking in my craw ever since. Since we are about to see another wage hike come Jan. (and since you chose not to mention the much larger wage hike that came back in ’09 in your nifty little equation), I’m going to take a few precious minutes to tell you my story.
I bought a dying business back on June 1, 2006, worst possible timing. Within 9 months my price of goods jumped something like 200-300%, across the board. Corn meal went from $13 to $37 p 50# sack. Baking powder, $1.50 to $5 p tin. Top sirloin, $1.80 to $3.85 p #. My monthly food costs went from about $12,000 p month to over $30,000, all the while I’m still pitching in for the bi-annual vacation funds of a few dozen food reps, drivers, insurance reps, et al. Adjusting my menu prices to reflect this massive jump would have been suicide. The small increase I did make generated plenty of comments from my customers, but the truth is that for a while I was actually paying for people to come eat at my restaurant, and the little back-up cash I had disappeared quickly, forcing me to turn to a cash advance company at a ridiculous rate to make it through the winter of ’07, '08. Imagine working hard to create your dream, increasing business by 300%, and knowing that the more people that came in your door equated to nothing more than a faster drain on your bank account.
Eventually prices came down a little bit, but not much. In ’08 I was forced to move my family of 5 out of our stick-built and into a 1,400 sf, 3 bedroom double wide here in Romaine Village, reducing our rent from $1,300 to $418.
I had plans to expand our menu to include breakfast which would have empirically increased the hours available to my loyal employees, but that was impossible because I could no longer afford the equipment upgrades necessary for the expansion. Now, 5 yrs. later, I have managed to cobble together a few pieces of used equipment and I finally introduced my breakfast menu last September, which has been very well received. In fact, I am now top rated in my category, and in the top ten in Bend, according to TripAdvisor.com, regardless of what your annual westside-centric beauty pagent says, regardless of the fact that I don’t have a millionaire backer bringing bands up from LA to play on my front porch, and allowing me to sell alcohol at no profit to all the “hipsters” downtown.
I used to allow myself a 2 hour break between lunch and dinner to rush home and spend a few minutes with my wife and 3 young children, but that became untenable, and so I reduced that break to one day a week. Now even that is no longer an option. I have been cutting employee hours and raising prices in order to try and keep the doors open, and will now be running the restaurant through the slower winter months with only one employee in the kitchen, and no one on the floor with me for most of the days of the week. I work 7 days, 90+ hrs p week. My time with my kids has been reduced to about an hour a day in the morning before they go to school and I go to work, and a few hours on Sunday evening since we close at 2pm that day. They are usually asleep before I come home at night, Monday through Saturday. I prep the food in the morning, and mop the floors at night. I used to attend my kids basketball and baseball games, even though taking the 2 or 3 hours off cost me $35-$60 p game. That also is no longer an option. My 8 year old son, bless him, sometimes chooses to come to work with me on Saturday afternoons because he misses his papa. I have enjoyed a grand total of 8 full days off this year, and I could tell you exactly which days they were and what I did with them if you were interested. A sick day costs me $120-$160 in labor and anywhere from $60 to $140 in tips, so I don’t get sick. A trip to the barber costs an additional $25 on top of the price of a trim. I sleep about 5-6 hours p night, but only 3 on Friday & Saturday.
The truth is that the continual wage hikes in Oregon empirically force me to cut the hours of my employees, and raise the prices on my menu. That should be obvious to college educated journalists, but I guess they didn’t teach you much about modern day economic realities while you were pursuing your Liberal Arts degrees.
As for that gag reflex-inducing line about buying a few more qts. of milk, give me a break. As far as my wait-staff is concerned it’s far more likely to go towards a few more PBR tall cans, and when it comes to the electric bill, yeah, it’s pretty high, but paid for by the grow-op. The people who do get hurt are my hard working, non-tip earning kitchen staff, who will never earn what they deserve from me as long as I have to pay the front-of-the-house staff $9.00 an hour, which is more than doubled by their tips. A lower minimum wage for tip-earning employees is a no-brainer. Or maybe it does require a brain to understand this.
The up-coming wage hike will empirically drive me deeper into poverty as I try to keep the doors open until Spring arrives, at which point I must seriously consider selling the beast and moving to Colorado or possibly N Carolina, and re-opening in a state that has a more educated view of economic realities. As much as I love the theory of the central Oregon lifestyle, my business & family have no future here.
It’s true that these wage hikes have little effect on the larger mega-corps like Wal-mart and Costco, who can easily raise prices to cover the jump, as common folks have less and less small business options to turn to. But small restaurant owners like me are getting murdered. Ask the one-time owners of places like Bluefish, Merenda, Deep, Ernesto’s, Leonardo’s, The Downtowner, Hans, Cork, Bella Cucina, Volo, or that italian place that briefly operated where Amalia’s is now located. What was their name? I can’t even remember. Ask the owner of the Phoenix where he would be if he hadn’t found a big-money investor. Ask Gavin McMicheals. Hell, not even Subway could survive. My prediction is that in 10 years we’ll all be eating at the Costco food court, or at McDonald's, or maybe, during the summer months, at the food carts, which will have lost their quaint charm when they become the only option.
Well, I’d like to proof-read this letter, but I don’t have time. However, since you opened the door to petty name calling, I’ll finish by giving the Boot to the source’s regurgitation of knee-jerk liberal tropes that appear to be based on trust fund baby guilt rather than an awareness of economic realities. Measure 25 kills small business owners. Just ask Mike West (RIP), one time owner of The Bend Fish Company. Blindly raising the minimum wage every year to reflect the rise in inflation causes prices to go up, and hours to go down, at least when it comes to small businesses. It’s empirically obvious. Sincerely, JV Fuentes, small business slave. (Thanks for the “cult like following” tag. I'm sure my customers appreciated that.)
Thank you for your time. getting this letter off my chest after all these months gives me immense personal satisfaction.