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Plan sets regional minimum wage rates

Dembrow legislation aims to head off ballot box battle


Spurred by two ballot initiatives to raise Oregon’s minimum wage, a Portland lawmaker plans to propose legislation in February that would set different regional minimum wage rates based on cost of living and median income.

Sen. Michael Dembrow (D-Portland), who chairs the Senate workforce committee, said a legislative agreement could help avert an acrimonious and prolonged battle over minimum wages at the ballot box.

“Our hope is if we can pass it in February, that the campaigns will stop collecting signatures, and they’ll feel comfortable with it,” Dembrow said.

A legislative work group began at the end of last session, looking at some of the issues to consider in setting a minimum wage.

“What became clear from that was we needed to do something that is not one-size-fits-all,” Dembrow said. “We needed to take into account cost of living and economic vitality in different parts of the state.”

Dembrow said he envisions setting three regional minimum wage rates — with the highest rate in the Portland metro area and the lowest in rural areas.

The rates would be phased in during a three- to four-year period, he said.

“Our goal here is to get the wage where families can make it without relying on public assistance,” he said.

Senate workforce committee members have yet to settle on exact numbers but hope to have those details ready in time for a public hearing Jan. 14.

The regionally tiered minimum wage would address the need for higher incomes in Portland, where housing costs are skyrocketing, without crippling businesses in slower economic areas such as the southern coast, Dembrow said.

One ballot initiative underway proposes hiking the state’s minimum wage to $15 per hour by 2019. Another initiative by a union-led coalition seeks to boost the minimum wage to $13.50 and give cities the authority to hike wages higher.

Dembrow’s legislation would not repeal state preemption on wage hikes, which prohibits municipalities from increasing the minimum wage.

Giving cities the authority to independently hike wages can be problematic, Dembrow said.

“If Portland does raise the minimum wage, and Beaverton doesn’t, there is a concern a lot of businesses would relocate,” Dembrow said. “We have had a lot of experience with the state setting its own minimum wage, but haven’t had a lot of experience with cities doing it. That is a relatively new phenomenon.”

In the past two years, Washington, D.C., Seattle, San Francisco and Los Angeles have taken action to gradually raise the minimum wage to $15.

House and Senate leadership and Gov. Kate Brown have indicated passing minimum wage legislation is a priority for the upcoming session.

Senate President Peter Courtney, D-Salem, said he supports increasing the minimum wage but has yet to decide on a specific amount. He said he also agrees with repealing the preemption on local wage hikes, so that cities such as Portland could raise wages beyond the statewide floor.

But passing wage legislation in February will depend on securing support from key business leaders, he said.

If the Legislature fails to reach a consensus, House Speaker Tina Kotek, D-Portland, plans to support the Raise the Wage coalition’s ballot proposal to increase the minimum wage to $13.50, said House Democratic spokeswoman Lindsey O’Brien.

So far, Portland Democrats have been dominating the discussion about wage increases, said House Minority Leader Mike McLane, R-Powell Butte.

McLane said he has seen none of the proposals, but opposes any that take a one-size-fits-all approach to the minimum wage because of the state’s geographic and economic diversity.

McLane said he is concerned higher wage mandates might hurt small businesses — especially in rural areas. He said inflation from hiking wages also could price out retirees on a fixed income and dash job opportunities for young, entry-level workers.

“I understand when you are in Portland that the world is different than Prineville, but I certainly hope Gov. Brown and House Speaker Kotek will show concern for all of the Oregonians who don’t live in the city of Portland,” McLane said.

Several minimum wage proposals stalled last session, partly due to competition with paid sick leave legislation and partly due to cautiousness from rural Democrats, who were concerned about the impact on rural economies.

“The economies in the I-5 corridor and along the Columbia River have really come back, and on the coast, the economy has pretty much stayed the same since the ‘80s and ‘90s,” said Sen. Arnie Roblan, D-Coos Bay. “So, it makes it hard seeing one minimum wage work across the state.”

A steep increase to $15 was “a hard pill to take when you are trying to get the economy moving again,” Roblan said, adding tha many of his constituents on the coast are seniors on a fixed income. He said he worries hiking the lowest wages to $15 could make things like going out to dinner once a week unaffordable.