Will Oregon Price the Least-Skilled out of the Workforce…Too Slowly?

CascadeNewLogoBy Steve Buckstein

As Oregon’s February legislative session approaches, Governor Kate Brown wants to head off a contentious minimum wage ballot measure that would raise Oregon’s rate up to $15 per hour over three years. But, her plan seems to upset all sides.

She has determined that the Portland area minimum wage should be exactly $15.52 by 2022. She has also figured out that the rest of the state should impose a $13.50 minimum by 2022. “That is entirely too long” to wait, according to activists behind the ballot measure.

Solid research concludes raising the minimum wage at all is not an effective way to alleviate poverty. It is, however, an effective way to pander to voters who either don’t read the economic literature, don’t believe it, or don’t care.

Oregon already has one of the highest minimum wage rates in the country at $9.25 per hour. But, with some cities and states determined to raise their rates to $15 soon, our Governor’s $15.52 Portland area proposal over six years may not be enough to keep us at the forefront of pricing the least-skilled people out of the workforce altogether.

Perhaps she should go for a $30 minimum wage rate by 2030. Or a $40 rate by 2040. Or…well, you get the idea.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 05:00 | Posted in Economy, Employment, Gov. Kate Brown, Jobs, Labor, Oregon Government, State Government, Unemployment | Tagged , , , | 34 Comments |Email This Post Email This Post |Print This Post Print This Post
  • MrBill

    No doubt a higher min. wage will help some. But whenever you raise the cost of something, people tend to buy less of it. With less min. wage labor being requested at the higher rate, some will be left in the cold. The $15/hr proponents will of course be able to point to people who were helped by it. No one will notice or care about those who are hurt.

    • Very true. Plus, if anyone does notice those who are hurt, they will blame employers for not hiring them rather than blame the politicians and minimum wage increase activists who are really to blame.

      • Bill Post

        The REAL reason behind the move to raise the minimum wage in Oregon: https://billpost.us/2016/01/25/public-employee-unions-in-favor-of-minimum-wage-hike/

        • Yes, Bill, you put your finger on a REAL reason the public employee unions might be bankrolling these efforts.

          But there are other supporters who simply misunderstand how labor markets work and incorrectly assume that every business owner is rich and greedy and will simply pay more than an employee is worth to them if government simply orders them to do so.

      • Connie Kosuda

        in your dreams, perhaps, but not reality.

    • Connie Kosuda

      well, republicans certainly don’t. that’s for sure.

      • thevillageidiot

        so you are suggesting that all unfair wages (minimum wage) paid by business are run only by republicans?

        • Connie Kosuda

          no, I did not say that.

      • MrBill

        I care. That’s why I don’t support skewing the labor market by upping the min. wage. It benefits some at a cost to others.

  • Bob Clark

    Free to transact or not transact at the price you choose. Free minds and free people, for better or worse. And seems to have served America quite well.

    • David from Mill City

      At the root of your comment are two invalid premises, first that there is such a thing as a “Free Market”. Second, that government is, through laws, rules and regulations, such as a minimum wage, is interfering with it. First, there is no “Free Market” and business as we know it could not function in a real “Free Market”. Second, government through its laws, rules and regulations is not interfering with the market place, rather it is establishing it and making it able to function.

      • thevillageidiot

        So with your insightful grasp of free markets please explain to us uneducated what is a free market and why doesn’t It work?

        • David from Mill City

          The “Free Market” is a mythical economic entity where commerce occurs completely free of any form of governmental interference. It reality this “Free Market” does not and cannot exist. This is because commerce above the level of simple barter can not exist without governmental actions providing the framework for commerce to exist. To put it simply, governmental action established the market place and makes it possible for it to function. The amount and type of influence a government exerts on the market place should be a subject of continuous and strenuous debate but a call to return to this mythical “Free Market” shows either a complete lack of understanding about the interrelationship between government and commerce, or a level intellectual dishonesty.

    • Connie Kosuda

      it is not serving America quite well, or indeed well at all. It serves the top 1 or 2 % very well / the corporations / the koch boys and their gang / not the people who work for a living. and we are not ‘free’ in this country , and the republican think tank is an anathema to society. good link coming shortly.

  • No Hypocrisy

    What garbage.

    You just don’t want the minimum wage to increase because it might lower the profits of your corporate masters by a tad.

  • thevillageidiot
    • David from Mill City

      What is absent from these articles is any statement from Wal-Mart as to why it decided to close those particular stores. There is speculation on the part of individuals not directly associated with Wal-Mart as to why these particular stores were chosen, which while interesting may have no foundation in reality. What is also absent is any speculation as to what the
      response of Wal-Mart’s competitors will be after Wal-Mart leaves the area and how many of those currently employed at those stores will find employment with other retailers who expand to fill the void left by the closing of those stores.

  • David from Mill City

    To start with the basic premise behind this article’s title is incorrect. The minimum wage does not keep the un- or semi-skilled worker out of the work force. What keeps those individuals out of the work force is that they are less qualified then the other applicants for the jobs they are applying for. Unfortunately, for a variety of reasons. what use to be first jobs, filled by un- or partly-skilled individuals have now become regular long term employment. Given a choice between a fully qualified individual with a strong work history and a unskilled individual without a work history most employers hire the former rather then the latter.

    Second, the purpose of the minimum wage is not to alleviate poverty, it is to insure that an individual working full time is not in poverty.

    The problem with the current minimum wage proposals is not that they are too high but rather they are too low. Currently, to qualify for SNAP (food stamps) a family of 4 must have a monthly gross income less than $ 2,628. Assuming 1 bread winner, employed full time, that is $15.16 an hour [ (2628*12)/2080 =15.16]. So if the goal is to get a full time worker off of food stamps $15.00 an hour is already too low. As it is unreasonable to expect a local economy to absorb an immediate increase from the current $9.25 to $15.16, all the proposals spread the increase out, dividing it into a number of smaller increases spread out over a number of years. Which means, given any level of inflation, by the time the minimum wage reaches $15.00, $15.00 will not be enough. This problem is not in the basic concept of a minimum wage, but rather in the manner the increase is implemented.

    • thevillageidiot

      I must congratulate you for your insightful grasp of basic economics and market principles. It is genius! may be you should look at the posted links to stupid people who think they are economists.

      • Eric Blair

        How do you know he didn’t look at your links and disagree with them. You’re aware that there are economists who support raising the minimum wage to $15.00 per hour? Yes?

        I’m sure you bow to every authority referenced by liberals.

  • Myke

    One really needs to wonder why anyone would burden themselves with student loan debt to improve their position in the market place only to see the value of their potential diminished by a burger flipper with no ambitions.

  • No Hypocrisy

    Mr. Buckstein,

    Please list all of the policies that you support that have a track record of making life better for those at or near the bottom of the income barrel.

    • Here is one set of policies, including free markets, trade and industrialization, that are recognized by the World Bank for allowing the number of people in extreme poverty to drop to a record low as of the end of 2015: You can read about them and how they have benefitted those at the “bottom of the income barrel” here: https://oregoncatalyst.com/32042-number-people-extreme-poverty-drops-record.html

      • David from Mill City

        Yes, adopting a policy that lowers the world poverty line to $1.90 a day reduces the number of people in poverty. Just think what the reduction would have been if they had adopted a policy that lowered the world poverty line to $1.00 or 75 cents a day.

        It must make the homeless in the United States feel good to know that while they do not have enough money to live on, they are no longer in poverty.

        • You must have missed the comment in the World Bank document I linked to that “The new line preserves the real purchasing power of the previous line (of $1.25 a day in 2005 prices) in the world’s poorest countries.”

          • No Hypocrisy

            “The Bank’s president attributes this good news to ‘strong growth rates in developing countries in recent years, investments in people’s education, health, and social safety nets that helped keep people from falling back into poverty.'”

            In other words, people are doing better because of policies that are directly opposed to “libertarian” policies.

          • “Investments in people’s education, health and social safety nets” were credited for helping keep people from falling back into poverty. It was economic growth generated by globalization, free markets, property rights and the rule of law that helped get people out of poverty in the first place; not at all opposed to “libertarian” policies.

          • No Hypocrisy

            Nice spin move.

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