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Editorial: A voice of reason on minimum wage

Oregon's still-recovering economy can't yet bear an aggressive increase in the minimum wage

Published on January 1, 2015 12:01AM


Oregon’s minimum wage increased 15 cents today.

The new rate — $9.25 per hour — remains the second-highest in the nation, behind only our neighbor to the north, Washington. Yet several Oregon politicians already are ginning up support for a $15 minimum wage.

We’re pleased to read that Peter Courtney, president of the state Senate, is lukewarm to the idea. He cautioned fellow Democrats not to overreach on the issue, saying it could jeopardize their party’s new majority in Salem.

Courtney’s advice is wise for more than reasons of political power. A sharp increase in the minimum wage in a state that is still recovering from a brutal recession is risky. There is scant evidence that such a boost would benefit the state or local economies.

The economic impact of hiking minimum wages is unclear. There are dozens of research papers on the subject. Their conclusions are conflicting.

Some argue that minimum wage increases boost consumer spending. Others say the impact is short-term, encouraging low-wage workers to take on more debt for big-ticket items such as cars.

Much depends on how employers would react to a large increase in the minimum wage. They could hire fewer workers. Or raise prices. Or lay off higher-paid employees. Again, economists disagree on the potential response.

Oregon’s minimum wage is adjusted each year for inflation. This has kept it at half the median hourly wage for all Oregon workers. That is a sound level for a wage for unskilled workers compared with employees with years of experience or specialized skills.

The $15 minimum wage appears to be the new gold standard for activists, unions and others doing battle in the name of economic equality. The city of Seattle was the first to make the leap, though its City Council tempered the impact by phasing the increase over several years. San Francisco soon followed suit.

Oregon legislators should at least wait to see how those jurisdictions fare under the $15 minimum before following their lead. As Mark Twain said: “Get your facts first, then you can distort them as you please.”

INFO BOX

Source: Oregon Employment Department. Estimates are for Q1 of 2014



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