opinion

Oregon’s small businesses want a minimum wage increase

Small businesses in Oregon are urging legislators to raise the state’s minimum wage, and there are logical reasons why it would be good for them to do so:

•A minimum wage increase would put money in the hands of hundreds of thousands of small business customers.

Nearly 600,000 Oregon workers would see their pay increase if the Legislature raised the minimum wage to $15. Unlike the wages of higher earners, the wages of lower wage workers re-enter the economy quickly, which boosts businesses while giving Oregon workers a fair shot to support their families instead of just barely getting by.

As a group, lower-income workers in Oregon would gain $3.2 billion in added wages. Those workers will be able to spend that money at their local mechanic shop getting the repairs they’ve been putting off, or at their local restaurant instead of at a cheap fast food restaurant to save some cash. That might partially explain why surveys show small business owners’ chief concerns are “more customers” or “poor sales” instead of wages.

•Staff turnover resulting from low wages is really expensive. There’s evidence of other benefits that a minimum wage will bring to small businesses: Extensive research from UC Berkeley shows that increasing the minimum wage doesn’t result in job loss or reductions in hours for employees.

In fact, research found that any increased costs were offset by cost savings from less employee turnover, reductions in absenteeism and improved job performance. As Renee Spears, owner of Rose City Mortgage has said, “If employees are paid a wage that allows them to put food on the table and take care of their families, they’ll be more productive and more likely to stick around.” Increased costs may also be offset by increased spending by low-wage workers and their families, boosting local economies.

•Minimum wage increases haven’t hurt Oregon’s small business job growth. Between 1988 and 2012, Oregon raised its minimum wage three times before indexing it for inflation. During that time, small business growth occurred mostly uninterrupted, with contractions seemingly tied to the business cycle and not tied to minimum wage increases.

•Small business employees have families to support, and that matters to small business owners. A full-time minimum wage worker in Oregon earns just $18,925 a year, not nearly enough to afford housing, food, gas and other necessities for a family, let alone save for the future.

Too many Oregonians making up a sizable share of the full-time workforce remain dependent on public assistance programs, while corporate CEOs take home record profits. Small business owners understand that a vibrant local economy is sustained by a virtuous cycle in which workers also play an important role as consumers. Small business owners know it’s better for everyone when their employees earn a living wage.

Legislators should act fast to raise Oregon’s minimum wage – not just because it’s good for workers, but because it’s especially good for business.

Stephen Michael of Portland is the state director of The Main Street Alliance of Oregon, a network of over 2,500 small businesses throughout Oregon working to lift up the real voices of small business owners in public policy. He can be reached at oregon@mainstreetalliance.org.