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Senate passes three-tier minimum wage

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The bill would hike wages to $14.75 in the Portland metro area, $12.50 in rural and coastal areas and $13.50 in the rest of the state by 2022.


Salem – The Oregon Senate on Thursday passed a controversial bill that sets three regional minimum wage rates throughout the state.

The bill now proceeds to the House of Representatives, where there appears to be enough support for passage, lawmakers said.

The bill hikes wages from $9.25 to $14.75 in the Portland metro area, $12.50 in rural and coastal areas with struggling economies and $13.50 in the rest of the state by 2022. The rates are based on median income and cost of living in those regions and what it takes to be “self-sufficient” – to pay basic expenses such as food, housing and transportation, said Sen. Michael Dembrow, D-Portland, who proposed the measure.

The Senate approved the measure along party lines 16-to-12 Thursday after more than six hours of debate.

“It’s our task as legislators to craft a policy that takes the needs of all Oregonians into account,” Dembrow said. “I believe that this bill does that.”

Republicans launched a tactical attack to stall the measure. They forced a vote to move the bill back to six different committees to consider amendments but failed at each attempt in the Democrat-dominated Senate.

Republicans said the increase would kill jobs, hurt small businesses and farmers and make goods and services more expensive for seniors and people with disabilities who are on fixed incomes.

Sen. Kim Thatcher, R-Keizer, said the bill would harm the “very people you’re trying to help.”

Dembrow responded by citing a study by researchers from Deakin University who looked at 1,500 estimates in 64 studies on the impact from minimum wage increases on employment and found there was almost “zero effect.”

Fiscal impact of minimum wage hike

Republicans accused Democrats of hastily pushing the bill through the Senate without sufficient consideration to the fiscal impact on state and local governments. Sen. Doug Whitsett, R-Klamath Falls, motioned to send the bill to the Joint Committee on Ways and Means to do a thorough fiscal analysis, especially the cost of the increase to the state.

“If we don’t do this, we are going to confirm people’s suspicion that Salem is the capital of unintended consequences,” said Senate Minority Leader Ted Ferrioli, R-John Day.

The legislative fiscal office has reported that the cost of the measure to state and local governments is indeterminate. Part of the difficulty in estimating the cost is that the measure gradually takes effect, and several factors are unknown such as the number of jobs paid more than minimum wage that might be subject to a corresponding increase. The office also said the state could expect revenue increases from the additional income that could offset some of the costs.

Sen. Richard Devlin, D-Tualatin, co-chairman of the Joint Committee on Ways and Means, said he doubted his committee could give better answers than the legislative fiscal office.

Republican alternative

Thatcher made a motion to replace the bill with an alternative proposal from Republicans failed 19-to-9.

Thatcher’s proposal would have raised minimum wage by 25 cents in 2017 while exempting 20 rural and economically distressed counties and certain types of employers and workers. Employers with 50 employees or less, agricultural and timber workers, temporary employees working 720 hours or less per year and workers 19 and younger also would be exempt from the increase.

The 20 counties that would have been exempt were Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Josephine, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, Wasco and Wheeler.

The Republican alternative also provided a network of tax credits for certain costs associated with raising minimum wage in other parts of the states, including companies with 100 employees or less.

Increases start in July

The proposal that passed Thursday hikes wages beginning in July from $9.25 to $9.75 statewide.

The minimum gradually would climb to $14.75 in 2022 in the Portland urban growth boundary, which includes parts of Multnomah, Washington and Clackamas counties. It will rise to $13.50 in Benton, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco, and Yamhill counties, and parts of Multnomah, Clackamas and Washington counties outside Portland’s urban growth boundary.

In rural areas, the minimum would increase to $12.50. Those areas include Malheur, Lake, Harney, Wheeler, Sherman, Gilliam, Wallowa, Grant, Jefferson, Baker, Union, Crook, Klamath, Douglas, Coos, Curry, Umatilla and Morrow counties.

The bill was intended to offer an alternative to ballot initiatives that would raise the minimum to $15 or $13.50 statewide and would repeal a ban on municipalities and counties from setting a higher wage.


By Paris Achen
Portland Tribune Capital Bureau Reporter
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