No Link Between High Unemployment and Minimum Wage Hikes

The fact that Oregon has an unemployment rate of 6.5%, one of the worst in the nation, has no relationship to Oregon’s minimum wage of $7.95 (going to $8.40 January 1, 2009, the second highest in the nation!). Oregon’s unemployment grew faster in July and August than in 45 other states (US Bureau of Labor Statistics).

The federal minimum wage of $6.55 per hour is not good enough for Oregonians. We live in a high-cost state and people, no matter their education, experience, or level of contribution, must be paid enough to “live” and $8.40 an hour is the exact right amount as tabulated by the state legislature.

“The fact that many minimum wage jobs have been lost in Oregon has nothing to do with the minimum wage being so high,” stated Malcolm Grundig, Senior Economist for the Freedom Foundation. “People who mention this nonsense about a correlation between high minimum wage and job loss are simply clueless. Small businesses are the backbone of this country, and, as such, are making plenty of money. They can afford to pay their workers a living wage. The big companies have plenty of money, too, and can also afford to pay. I applaud Oregon for the foresight and wisdom to mandate, by law, these constantly adjusting higher minimum wages, “concluded Grudig.

Grudig believes other forces are at work in Oregon’s high unemployment figures. He mentions the nation’s rough times, our distance from major markets, our high rural population, the high cost of fuel, the declining quality of public education with regard to job preparedness, the decline in work ethic among the younger generations, and greed as all contributing to the high unemployment rate in Oregon. “Additionally, ” added Grundig, “the layoffs from the Oregonian alone have skewed the large city unemployment numbers. If you remove those layoffs, Oregon actually moves up a notch, but still remains in the top ten states for high unemployment.”

What’s to be done? According to Grundig, nothing. “This mess we are in will self-adjust fine, thank you. To go back to the dark ages of businesses and the marketplace setting workers’ wages is simply misguided at best. Given time, Oregon will creep back to a seasonally-adjusted unemployment rate of about 6.3%, which is really not that bad if you think about it,” concluded Grundig.