Wage hikes put taxpayers, small business at risk

The state, particularly rural Eastern Oregon, faces a veritable parade of horribles in the proposals for increasing the state’s minimum wage.

The public employee unions demand a higher minimum wage, and have made it clear that they will take that cause to the voters if legislators don’t dance to their tune. At a time when we need strong leadership and common sense, Gov. Kate Brown is looking more like a conciliator than a leader. Her efforts thus far seem more aimed at appeasing the unions than taking charge of this conversation and stuffing a bad idea back in its box.

What’s missing throughout the discussion is an option for “no change.” It seems a foregone conclusion that Oregon will raise its minimum wage, thanks to the unilateral decision of the unions. So the question being debated now in Salem is not whether, but how much.

The union proposals range up to $15 an hour statewide, with variations on that theme. Both Republicans and Democrats in the Legislature have now proposed alternatives that would increase minimum wages cross the state, but slightly less for the rural areas. We can thank the voices of a lot of people in Eastern Oregon for the growing recognition that their communities could be seriously harmed by the wage plans.

Still, even the regional plans offer little solace in economically struggling places like Malheur County, where small businesses are apt to get smaller – and even more scarce – if forced to pay any higher wage for the entry-level and part-time jobs that keep the doors open. Many of those jobs were never envisioned as family-wage positions, but somehow that’s become the expectation from Salem. Further, all of these plans pose serious trouble for municipalities which will be asked to ratchet up all hourly wages, not just the minimum – posing a disastrous scenario for their budgets.

The current minimum wage in Oregon is $9.25 an hour, so the $15 campaign is talking about raises of nearly $6 an hour – not exactly peanuts. The governor’s initial proposal called for an eventual hike to $15.25 for Portland and $13.50 for the rest of the state – no peanuts there, either.

State Rep. Cliff Bentz, R-Ontario, has called the governor’s plan “reckless” and urged rural citizens and merchants to voice their concerns to legislators in Salem.

“Studies indicate that minimum wages set by governments without regard to the median wage result in substantial job loss and other damages, such as higher daycare costs, no summer jobs for teenagers, higher prices for senior citizens, and budget-busting wage increases for non-profit and charitable organizations,” Bentz said last week.

Any increase would be of particular concern in Malheur County, where the farming economy straddles the state line. A hike to $15 or even $13.50 would put local businesses at an extreme disadvantage to their counterparts in Idaho, where the minimum wage sits at $7.25 an hour.

Brown’s plan stalled last week as yet another proposal arose in the Senate for a regionally diverse wage hike. And that sparked another round of threats from the unions to get in line or they’ll take it all the way to the ballot box.

Amid this power struggle, we hope legislators will seriously analyze the far-reaching impacts of all of these proposals. This decision should not be based on heartfelt sound bites about workers in need, but a clear evaluation of potential job reductions and – equally important – the ramifications for state and local government employment costs. The taxpayers’ tab must be considered.

We offer this message to legislators: If you really want to better the prospects for workers, adopt policies to bolster job training programs and help businesses create and retain more higher-wage positions, so part-time and entry-level workers who hone their skills can have real opportunities for advancement. Simply mandating a higher wage at the bottom of the scale is an expensive, feel-good approach with unfortunate ramifications. It will cause businesses to retrench on hiring and hours, will force private and public employers to ratchet up other salaries to levels they can’t afford, and may even make many of those earning the new minimum ineligible for safety net services they now receive. From here in Malheur County, that looks like a bad deal – and worse public policy. – SC