President Roosevelt introduced the minimum wage in 1938 under the Fair Labor
Standards Act to maintain a “minimum standard of living necessary for health, efficiency and general well-being, without substantially curtailing employment”. It’s now 77 years later and the ideal minimum wage is still a topic under nation and
President Obama has called on Congress to raise the federal minimum wage from $7.25 to $10.10 an hour. Currently 29 states have set their minimum wage above the federal level, including Oregon, which now holds the highest wage behind the state of Washington at $9.47 and D.C. at $9.50.
At the beginning of this year, Oregon saw an increase from $9.10 to $9.25. The 15- cent raise is part of an automatic annual adjustment that uses calculations based on the US City Average Consumer Price Index for All Urban Consumers to account for inflation.
Nick Beleiciks, Oregon’s state employment economist, notes that while “the buying power of the U.S. minimum wage has been eroded by inflation since the last time it was raised in 2009… Tying Oregon’s minimum wage to inflation has successfully preserved the buying power earned from each hour worked by people in minimum wage jobs.”
The Bureau of Labor and Industries reports that roughly 142,000 Oregon workers received the 15-cent raise —that’s less than 10% of Oregon’s labor market. Still, state commissioner, Brad Avakian, expects the increase to generate $25 million in new consumer spending this year.
According to the Massachusetts Institute of Technology’s Living Wage calculator, Oregon’s adjusted minimum wage is still not enough to provide an individual with the economic security to support a family.
The 2014 Oregon Workforce Report by the University of Oregon Labor Education and Research Center finds that over 1 million Oregonians rely on food stamps and other public services. “Oregon has one of the highest percentages of workers receiving state assistance and one of the lowest corporate tax rates in the country,” the report states, “The cost of providing this assistance is high—taxpayers subsidize
corporations’ reliance on a low-wage workforce to the tune of $1.7 billion a year.”
Seattle has agreed to gradually increase the city’s minimum wage to $15 beginning this April, inspiring similar movements in over 190 U.S. cities. In Oregon, Multnomah County’s Board of Commissioners voted last December to raise the minimum wage for workers employed by the county to $15 by July 2016, making it the first and largest county in the state to do so.
Proposal LC1911, drafted by Portland group PDX 15 Now, would begin increasing wages in 2016 leading to a $15 living wage in 2017. The draft bill received sponsorships from 10 Democratic lawmakers this past December, including Ashland’s Rep. Peter Buckley and Medford’s Sen. Alan Bates. Critics acknowledge that too high of an increase could result in unemployment for least-skilled workers, low-wage workers being disqualified for state benefits, and increased competition in the labor market.
“An EC 201 or EC 202 student would say that some businesses will hire fewer workers if wages go up, but some businesses may see more sales if their customers’ incomes rise,” notes Beleiciks.
Considering the scope of the $15 wage increase, Beleiciks says that its affects on the labor market remain uncertain, “About 40 percent of the jobs in Oregon pay $15 per hour or less. There hasn’t been an increase in Oregon’s minimum wage in recent history that affected that many jobs.”
Legislature will convene in February with an expanded Democratic majority. Be sure to stay informed on the progression of LC1911; it could be on this year’s ballot.