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Minimum wage proposal divides East Multnomah County employees, businesses

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For Gresham residents and businesspeople, raising Oregon’s hourly minimum wage is a great or bad idea depending on whether you work for minimum wage or are responsible for paying it.

Last week, Gov. Kate Brown proposed increasing the minimum wage over six years from the current $9.25 an hour to $15.52 in the Portland area.

Workers who currently make the minimum wage told The Outlook this week it’s long overdue. Business owners disagreed.

“To me, it is insanity to even think about doing this,” said Lila Leathers-Fitz, president of Leathers Fuels, which owns 24 Shell gas stations in the area.

Noting that Oregon’s minimum wage is $2 above other states, she believes “we are doing pretty well.”

While Leathers-Fitz understands there is widespread support for an increase, she called Brown’s proposal “hurtful” to business owners. Leather-Fitz’s company has 76 employees.

Increasing the minimum wage would force her to raise pay for others in the company who make above minimum wage or “I’ll lose my best employees,” she said.

The 2016 Legislature will take up Brown’s proposal during its 35-day session starting Feb. 1.

Workers in Gresham, Troutdale, Wood Village, Fairview and other communities inside the urban growth boundary would benefit from the increase, while the rest of the state’s minimum wage would increase more slowly, to $10.25 by 2017 and $13.50 by 2022.

Unsurprisingly, people working for minimum wage generally favor the boost.

Erika Pech, a nursing student at Mt. Hood community College, is putting herself through school working part-time for minimum wage as a caregiver in a private home. The proposed $15.52 wage, she said, “would make it much easier to pay for rent, electricity and other utilities.”

Although she has no family to support, she said that “even single, it is hard right now.”

Like some other low-wage workers, Pech worries that bumping up the minimum wage might also increase the cost of living. But she advocates increasing minimum wage more quickly than the six years Brown proposes.

“Six years is a long time,” Pech said. “We’re struggling right now.”

Business concerns

Owners of restaurants and other small businesses, however, sing a different tune.

“Oh brother!” said Shirley Welton, owner of Shirley’s Tippy Canoe on Historic Columbia River Highway near Troutdale, when asked about increasing the minimum wage. “I can’t see how anyone thinks this is going to do anyone any good.”

Welton, who employs as many as 25 servers during the summer, said a minimum wage increase for servers — who make additional money in tips — would force her to pass some of the costs on to customers.

“There is no way you cannot raise the prices,” she said. “It concerns me. Our prices are high enough.”

The minimum wage increase dominated discussion at the Wednesday, Jan. 20, meeting of the East Metro Economic Alliance.

Local business and civic leaders gave five legislators an earful why they opposed Brown’s proposal.

Sen. Michael Dembrow, D-Portland, said it was better for the Legislature to pass a bill than let it go to voters via an initiative, which would likely be more difficult to implement. Several suggested that a minimum wage bill incorporate a special, lower wage for young people.

“It is important we not price youths out of job experience,” one participant said.

“I’m not convinced our smallest business can handle” this wage increase, said Rep. Chris Gorsek D-Troutdale, agreeing with a comment that the proposal is no substitute for sound economic stimulus policy. “When did a minimum wage job become the level of achievement in our society today? It is sad and it is depressing to think our bar is now minimum wage.”

Change for the better?

People in Cafe Delirium in downtown Gresham on Wednesday afternoon had mixed feelings.

Casey Palmer, a drug and alcohol counselor, has two daughters working as waitresses and a boyfriend who works in cabinetry for less than the proposed $15.52 minimum wage. For Palmer, the governor’s proposal is a long time coming.

“Those people work the hardest, those who serve and do customer service,” she said. “All my loved ones who make minimum wage, they’re not happy (with the situation). They work really hard and don’t make enough for what they do. It’s not enough to pay the bills and the rent costs that have gone up.”

While Palmer and her family support the wage increase, they have discussed the possibility that some customers may tip less if servers are better compensated in their paychecks.

“They live on their tips,” she said. “If they get $15 an hour, we’re afraid they may be expected to live on that instead.”

Apprehensions aside, Palmer believes there’s more to be gained than lost in the proposal.

“Their quality of life would be better. Their stress levels would go down. People would feel more a part of the organization they’re working for,” she said. “A lot of things could change for the better.”

Keary Matheny, a Gresham resident in the wholesale foods business, believes the minimum wage should increase with the cost of living, but fears Brown’s proposal will cause more harm than good.

“I think it will put a lot of little businesses in dire straits, because an employer would maybe hire fewer workers,” he said, gesturing toward the busy service counter at the cafe. “I don’t see how they can afford to jump people’s pay that quickly with the economy being the way it is ... I think it’s just too big a step all at once.”

Middle class wages

Cafe Delirium owner Cody Clark said he’d prefer more focus on improving middle-class wages in general, as opposed to tinkering with the state-mandated minimum wage.

“As a small business owner, I am forced to raise prices based on costs going up,” he said. “Sometimes it’s because of wage, sometimes it’s because of product ... The thought of now doing this increase to 40 percent higher is scary. So many small businesses will have to raise prices so high that many people may be turned off and stop shopping there.”

Clark emphasized the very concept of the minimum wage is to give people just entering the workforce a chance to gain experience on their way to higher-paying, career-oriented jobs.

“The focus to increase wages is on the wrong segment of the workforce,” he said. “The argument that people can’t ‘raise families’ (with the current $9.25 per-hour minimum wage) is not a great argument. That was never what minimum wage was intended to be.

“I don’t know the exact solution,” he added, “but I do know that this isn’t it.”