Rep. John Huffman, R-The Dalles, said Monday he has been frustrated by the lack of attention from media outlets and legislators alike about the effects of a minimum wage hike on the state budget.
“We have seen a lot of coverage, and concerns expressed, about what raising the minimum wage so drastically could do to small businesses, but it is going to have an enormous impact on the state budget as well and that is just being ignored,” he said.
Huffman’s District 59 includes The Dalles and western Wasco County, in addition to Wheeler, Jefferson and Northern Deschutes counties.
He said state contractors who work in early childhood education, home health care, youth services and other fields are going to be paid much more under the current minimum wage proposal.
However, he said House Speaker Tina Kotek, D-North Portland, and Senate President Peter Courtney, D-Salem, have not referred the bill to the Joint Ways and Means Committee for a cost/benefit analysis.
“Leadership is saying that there is no way to know what the actual costs will be until we pass it,” said Huffman.
“This feels a lot like then Speaker of the House Nancy Pelosi telling Congress that they had to pass the Affordable Care Act to know what was in it.”
Sen. Chuck Thomsen, R-Hood River, is a pear farmer and said an attempt to get an agriculture exemption for wages was not given consideration.
“Ag has no control over market prices so if operational costs get raised by a change in the wage structure then we can’t pass that on,” he said.
“There are almost no legislators right now in ag so I don’t think they understand how the industry works and that’s pretty frustrating.”
Thomsen’s District 26 includes much of east Multnomah County, as well as east Clackamas and Hood River counties.
He said Democratic leadership stated when introducing the minimum wage issue that if the Legislature didn’t act, a citizen initiative for $15 per hour statewide was likely to be approved in November.
“I don’t like the argument that we have to do this because a gun is being held to our head,” said Thomsen.
Huffman said the potential harm that could be caused by a major policy change that drastically affects the state budget and has not been vetted is of grave concern to Republicans.
“Voters were told that the short even-year session would be used to balance the budget, fix unintended consequences of policies from the previous session and take care of true emergencies,” he said. “This session is going far beyond the scope of what was sold to voters.”
Last week, the Democrat-controlled Senate approved the plan to raise minimum wage over six years to three different levels based on geographic areas. The proposal is now moving forward in the House, where Democrats also hold the majority, and includes the following:
Workers within Portland’s urban growth boundary would see their wages increase to $14.75 by 2022;
Those working in Wasco, Hood River, Jackson, Benton, Clackamas, Clatstop, Columbia Deschutes, Josephine, lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook, Washington and Yamhill counties would earn $13.50 per hour by 2022; and
Employees in Malheur, Lake, Harney, Wheeler, Sherman, Gilliam, Wallowa, Grant, Jefferson, Baker, Union, Crook, Klamath, Douglas, Coors, Curry, Umatilla and Morrow counties will receive $12.50 per hour by 2022.
“This bill addresses the minimum wage issue as it relates to rising cost of living statewide,” said Sen. Michael Dembrow, D-Oregon, a chief sponsor of the proposal.
Huffman said, in addition to the direct effect of raising the minimum wage, there will be other costs added later.
He said leaders of public employee unions have already told state officials that they will be using the increase in their next round of wage negotiations.
“Workers who earned a higher wage for a greater skill set are going to want parity,” he said.
Thomsen said corporate stores are supportive of the wage increase, which most already pay because of a union presence, because it puts pressure on small businesses, which are their competition.
Basically, we are bargaining for private businesses and I don’t think that’s what we are here to do,” he said.
Oregon’s minimum wage is currently the ninth highest in the nation at $9.25 per hour. The federal minimum wage is $7.25.
If the proposed increases are approved, Oregon will take the top spot.
California and Massachusetts now have the highest state minimum wage, at $10 per hour, a recent $1 increase as a result of legislative action.
If Oregon’s increase is approved, as expected, the minimum wage would rise in the second tier, which includes Wasco and Hood River counties, to $9.75 on July 1 and then $10.25 on July 1, 2017.
The rate would increase to $10.75 one year later and $11.25 on July 1, 2019.
On the same date in 2020, the rate would be $12 and go up to $12.75 in 2021 and $13.50 in 2022.
A Feb. 4 press release by the Senate Majority Office outlined that an Oregon worker making minimum wage at a full-time job takes home about $19,000 a year, which is not enough to cover the costs of housing, food, gas, and other family necessities.
Democrats say that one in four Oregon workers brings home less than $25,000 per year.
The press release cited data from the University of Oregon’s Labor and Education Research Center that 88 percent of the nation’s low-wage workers are adults older than 20; 75 percent are women, 20 percent people of color and 27 percent are parents.
“Sen. Dembrow has worked diligently to improve the lives of minimum wage workers while recognizing the different economic circumstances that exist in our state,” Senate Majority Leader Ginny Burdick,
D-Portland, said of the proposal.
Republicans have called the minimum wage proposal a “business-killing measure.”
The Oregon Neighborhood Store Association calculates that as many as 67,000 jobs could be lost if operating costs increase.
The Oregon Chamber of Commerce, and The Dalles chapter, have joined agriculture groups, small business advocates and others in protest of the proposal.
“We are just starting to revitalize our economy and this is going to send us backwards and I’m not sure if we will recover from this,” wrote Lisa Farquharson, local chamber director, in an email alert asking people to contact legislators and make their voices heard before the final vote is taken.
She said the chamber represents 509 businesses with more than 6,500 employees.
“Minimum wage was not meant to be a sustainable living wage. It is an entry and training wage,” wrote Farquharson.
“If you do this then many of our employers will be faced with the choices of choosing an older person with more experience over youth.
This process is going to make it difficult for our youth to be working and earning money for continued education.”
She said seniors and others living on fixed incomes will also be adversely affected as the costs of higher wages are passed on at the grocery store and by service providers.