While supporters of the $13.50 and $15 dollar minimum wage campaigns say more money in Oregonians pockets will result in a boost to the local economy., economists say higher wages for minimum wage jobs can hurt the job market.
“Who’s the minimum wage worker? And who’s the economically disadvantaged family?,” Rogue Community College Business Instructor Ted Willhite says, “They’re different, the data shows that they’re different people.”
Willhite says the key to a thriving economy is not a higher minimum wage.
“Look at China or look at India, they have very low wages but they have a growing middle class that has money that they are dying to spend. Now how does that happen? It’s not because the minimum wage job is a career job, it’s because people will come in, do something for a year or 2, and because there’s so much activity employers will come in that need more people and move them up.”
Willhite says when the minimum wage increases, prices rise and jobs go elsewhere, often times being eliminated all together or replaced by technology. But supporters of Oregon’s two proposals say a higher minimum wage will pull half a million people out of poverty.
“Workers need a raise, period,” Michelle Glass of Oregon Action says.
Proponents for “Oregonians for 15” and “Raise the Wage” say higher wages will encourage big businesses to absorb increased labor costs, resulting in less government assistance and more money circulating locally.
“When we pay workers more, instead of paying corporations more in high profits that they don’t have to share we do see that circulation in local economies and that helps small businesses and that’s really what we’re starving for now,” Glass says.
“This is going to pull people past that [welfare] cliff, and be able to survive and receive enough money that they don’t need food stamps and they don’t need public assistance,” Jesse Sharpe, Deputy District Organizer for 15 Now PDX says.
But according to Willhite the people most impoverished need a job, not a raise.
“We make the mistake of thinking that a minimum wage job is a career job,” Willhite says, “it’s not, it’s a stepping stone.
Willhite says employers used to hire teens at minimum wage to work odd jobs like sweeping or sorting nuts and bolts at the hardware store. But he says many of those jobs don’t exist anymore, and less teens are working. His suggestion is not to raise the minimum wage but to lower it.
“Create more entry level jobs, and create a beehive of economy activity,” Willhite suggests, “The average wage would go up because they need people, and there’s a supply and demand issue going on there.”
But supporters of the proposals say the face of the minimum wage worker has changed over the years. They say what used to be a teenager working a summer job, is now a mother trying to provide for her family.
“75% of women are either sole bread winners or co-bread winners for their families,” Glass says, “and we have an issue in Oregon with high female-headed household poverty rates, and that impacts children, and that impacts those women.”
Economists fear such a big increase will cost some of those families jobs, therefore increasing the under the table job market, and causing inflationary pressure, all of which Willhite says does not help the impoverished.
“Minimum wage doesn’t help the impoverished household which is where we need to help,” he says, “We need to have more jobs. More jobs come from dynamic, vital economic activity, lots of money circulating.”
If both campaigns are validated by the Secretary of State’s office and gather the required 88,000 signatures, Oregon voters will see these measures on the ballot in 2016.
Click HERE for part 1 of Raising Oregon’s Minimum Wage.