Over the past year, Wal-Mart has been a microcosm of the debate about minimum wage. Well, as the country’s largest private employer with some 1.2 million workers, not so much a microcosm, but a massive case-study. A year ago, the retail giant was busted for sending its managers talking points to refute the benefits of increasing the federal minimum wage, which stood at $7.25.
This February, though, the company took a voluntary step to increase its own standards to $9 an hour, nearly 20 percent higher than the federal minimum. And, by next February, those wages will reach at least $10 an hour, the level to which President Barack Obama has proposed increasing the federal minimum, but far less than the $15 an hour that national labor groups are pushing.
These voluntary changes by Wal-Mart in minimum wages set an important framework for the current Oregon legislative session. Typically, state minimum wages pave the way for higher federal wages, with West Coast states often setting the highest bar. State representative Rob Nosse has proposed a three-step increase from the current $9.25 to $15 by 2018. Over the first two years of implementation, House Bill 2009 would dramatically raise minimum wages by 40 percent, and ultimately push Oregon’s minimum wage 60 percent higher than it is today. Oregon would be the first state to reach $15 an hour, although municipal employers such as the City of Portland have already set that standard for their full-time employees.
Rep. Nosse represents the inner-East Side of Portland, and the bill is also supported by Rep. Jessica Vega Pederson, who represents East Portland, which has working class socio-economic demographics not unlike Redmond or La Pine.
As HB 2009 moves into the thick of the legislative session, both sides are ladling on rhetoric—higher wages will raise thousands of families out of poverty on one side; inflation will boom on the flip side. But raising the minimum wage is far from an easy equation.
Yes, the most common sense argument is that paying higher wages will help those individuals and families struggling to pay for basic needs. Currently, an Oregon worker earning minimum wage takes home about $20,000 a year—hardly sufficient for housing, food, and child care. And, this is not an insignificant population: About 15 percent of all Central Oregon non-farm payroll jobs pay less than $10 an hour, and nearly half pay less than $15 an hour. Moreover, many of Oregon’s most entrenched problems are tied to its socio-economic divides. In the Department of Education’s recent survey of on-time high school graduation rates—which placed Oregon at the bottom—the single most accurate predictor for poor graduation rates is poverty.
However, there are also studies that indicate that higher minimum wages actually reduce job opportunities for working class men and women, as fewer employees are hired and sometimes the raises result in reduced hours. And, increased wages also likely means increased prices for many commodities and services, and also cuts into profits for business-owners—which, sure, for massive corporations like Wal-Mart and Starbucks means shuffling some numbers on the ledger, but for mom-and-pop shops may completely break them.
All told, it is not a simple binary debate and it is too simplistic for the Source to take an editorial stance for or against raising the minimum wage to $15 an hour. That said, it is perhaps the most critical discussion in the current legislative session, and we are encouraged that the Oregon Legislature has chosen to take the national lead in its consideration. We hope that it is a smart and robust debate, and one that shies away from rhetoric, but looks to real data and economic analysis for its answers.
On March 10, the Central Oregon Social Justice Center is organizing a grassroots lobbying day, and conversations with elected officials on wages. To join the trek over to Salem, contact Bruce Morris, coscjenter@gmail.
This article appears in Mar 4-11, 2015.
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Here’s what the liberal media propaganda machine will never report. In 1986 lower end housing was so affordable in Oregon you could purchase a home on the federal minimum wage. That was the year liberal democrats outlawed affordable housing through high density planning knowing this would create a dependence on the welfare state.
high density planning is based on the social engineering formula of forcing X amount of homes per acre at Y value to achieve Z desired property tax revenue. Affordable starter homes do not meet Y value and were taken off the market. Through new adopted inflationary codes that forced nothing but overkill design, and McMansions, Y value was achieved.
From 1944-1986 lower end housing had gained $0 in costs in 42 years in a free market. From 1987-1999 in an XYZ molested market this same housing was up a whopping 300%-500% in historic housing inflation.
This is specifically why Oregon went from leading the nation in affordable housing to #1 in homelessness and the #1 user in food stamps. Democrats will not tolerate affordable housing being built, and will only allow Section 8 development where they can shamelessly exploit the poor for vote.
Liberalism is a social disease.
You say “there are also studies that indicate that higher minimum wages actually reduce job opportunities for working class men and women, as fewer employees are hired and sometimes the raises result in reduced hours.” Please cite the source of these studies. Could they possibly be funded by the restaurant owners and grocery lobbies, the Chamber of Commerce, the Farm Bureau, and other groups who traditionally oppose paying higher wages to their employees? My independent research over the years since Oregon raised its MW and tied it to COL indicates that jobs in low wage industries (even fast food) have increased (the recent Great Recession being an exception on many levels). Those who propose a higher MW actually cite sources for their arguments. The Source should tell us who funds the studies you cite in your editorial. The low-wage workers who serve us our meals and lattes, work in retail in downtown Bend and at the Old Mill and beyond, all deserve a raise.