Oregon needs to find a new way to set its minimum wage
Each year, the state adjusts the minimum wage based on cost of living changes, in order to keep personal income in line with inflation. Unfortunately, the policy seriously flawed.
When the raise goes into effect, the Oregon’s minimum wage will exceed its federal counterpart by $1.70 – a 23 percent difference. The result is a higher cost to do business in Oregon than in the rest of the nation. This results in a higher cost for goods and services, which leads to even higher wages, and so on and so forth.
The continued wage hikes will adversely affect attempts to put people back to work in Oregon as well. As the minimum wage climbs higher, businesses will have to pay more for each employee. We feel that this discourages hiring, and would therefore cause the unemployment rate to go up.
Furthermore, the change makes it difficult for high school and college students to find employment. The more money start-up jobs pay, the more likely that experienced workers will see them as an attractive option. Why wouldn’t an employer choose a more experienced applicant, if they can pay them the same amount as someone without the experience?
Minimum wage jobs were never intended to pay a living wage. Instead they have been and should be an opportunity for new workers to acquire job skills and a work history.
Then there is a question of fairness. Many workers in Oregon have gone several years without a pay increase because of the effects of the recession. Meanwhile, people earning minimum wage continue to receive a cost of living increase. If most workers are waiting for pay increases, minimum wage earners should have to do the same.
Oregon needs to revisits its minimum wage policy. Even in good economic times, it will drive up the cost of living, and will present employment problems. A recession only compounds the problems.
If Oregon sticks with its current minimum wage policy, we feel the state economy will fail to get back on track, and Oregon will not be able to keep pace with other more successful states.