The $15 question: Legislature grapples with minimum wage

The movement toward a $15 minimum hourly wage, which has been gaining traction nationwide for years, has arrived in Oregon this legislative session.

Lawmakers have introduced a half-dozen bills in both the House and the Senate, each slightly different but with ultimately the same goal: to raise Oregon's minimum wage, already the second highest in the nation.

The statewide organization leading the charge has thrown its support behind one bill in particular. House Bill 2009 would raise Oregon's minimum wage in increments over the next three years, finally setting the wage at $15 in 2018.

Democratic support for the initiative is widespread. But business owners fear the consequences to their costs, while Republicans have other ideas about how to bolster Oregon's economy.

Advocates: The whole state benefits

The argument in favor of the wage increase is clear: Help Oregon's workers earn a living wage and pull more workers out of poverty, said Justin Norton-Kertson, one of the organizers of advocacy group 15 Now Oregon.

"People in our state are falling further and further behind," Norton-Kertson said during a February news conference at the Capitol. "No one worker should live in poverty ... $15 is not just an arbitrary number. Studies point to $15 as the right number to get working families out of poverty and off public assistance. Together, we can lift our whole state up."

According to the Oregon Center for Public Policy, increasing the minimum wage would have far-reaching impacts. A report by the Silverton-based research center found that a $15 minimum wage would mean immediate raises for 589,000 workers. Another 114,000 workers already earning that much would also see an increase as employers adjust overall pay ladders.

Overall, the wage increase would mean another $3.2 billion in disposable income for Oregon workers. That's money that would go straight back into the economy through increased spending, advocates say.

"I believe that Oregonians who work full time and play by the rules shouldn't be living in poverty and that these hardworking Oregonians, many of whom are parents trying to support a family, deserve a raise," said Rep. Rob Nosse, D-Portland, in an email. "This would benefit the economy around the state by giving Oregonians more money to spend at local businesses, from restaurants to child care."

Nosse, the primary sponsor of HB 2009, said he and his colleagues are still working to determine what would be the best course of action to raise the minimum wage.

"Many community leaders, including members of our business community, are working with legislators in this ongoing conversation," he said in the email. "I have co-sponsored multiple bills which would increase the minimum wage by different amounts at different times, and I look forward to working with my colleagues to determine what is the best way to give working Oregonians a much-needed raise."

Furthermore, advocates argue, lifting more workers out of poverty would ultimately mean savings to the taxpayer.

According to a January report from the University of Oregon Labor Education and Research Center, "Taxpayers subsidize corporations' reliance on a low-wage workforce to the tune of $1.7 billion a year."

Researchers recommended that "to improve Oregon's economy for all workers and address the burdens imposed by low-wage work, we need to raise wages. Oregon should phase in a significant minimum-wage increase to bring the minimum wage up to a living wage. We should strive to create jobs and set standards that allow workers to support themselves and their families."

Business owners: All costs go up

But for business owners, the hypothetical benefits of an uncertain future don't address the reality of their concerns: At what cost?

"Today, if I were to put that ($15 minimum wage) into effect, it would cost me over $100,000," said Treva Gambs, owner of Gamberetti's Italian Restaurant in Salem. "That's a lot."

The problem, she explained, goes far beyond simply bumping each employee's wages up to $15. If an entry-level hostess position paid $15 an hour, Gambs would in turn have to increase the wages of more skilled employees who have been with the restaurant for years.

"If I have to pay my host $15, my kitchen is going to want $18 or $20," she said. "I can't pay that. And there are different levels of skills and you do have to have a command of where we should start. I bring in a host right out of high school with no skills, and I bring her in at the same wage as someone who's been working for four years and earned that?"

Additionally, other companies that Gamberetti's does business with could be increasing their costs to absorb wage increases.

"Each farmer, he's got to pay his workers $15, so my mushrooms go up because they have to raise prices," she said. "Olive oil has to go up. My accountant, my window cleaner. It's not just my payroll. It goes all the way up the chain."

Gambs had dozens of concerns about a statewide $15 minimum wage. What about businesses just starting out? What about the differences in cost of living among cities? Where's the proof that higher wages will translate into increased spending?

"Nobody's really done this," she said. "I've done a lot of reading where they ask, would you spend more? And the answer is that, I would spend a little. I don't know if that's going to be enough."

GOP: Maybe there's a better way

Republicans, meanwhile, are skeptical about whether a minimum-wage increase is the best way to address poverty and economic recovery.

Sen. Kim Thatcher, R-Keizer, vice chair of the Senate Committee on Workforce, said she doesn't support the idea of a minimum-wage increase.

"I think we should focus on creating a pipeline of workers who can work in high-wage jobs so we can attract those and simultaneously work at attracting those businesses that will create high-wage jobs," she said. "I think that's what we should be trying to focus on, rather than just making sure the minimum wage is high."

No worker should want to stay at minimum wage, she said. Instead, they should be gaining the skills and experience necessary to move up the ladder into higher-paying jobs.

"I think we should be aiming to help people get past minimum wage instead of giving them a raise at minimum wage," she said. "Like looking at the STEM programs and career technical training in our high schools and colleges. Things that give people skills so they are ready to work."

But it's not just minimum wage, Republicans say. It's adding yet another item on top of a growing list of mandates and requirements for Oregon businesses.

"We have the same concerns about this bill that we have about the bundle of other bills that seek to drastically alter the employer-employee relationship in Oregon," said Kara Walker, spokeswoman for the House Republican Caucus, in an email.

"First and foremost, House Republicans want to see incomes rise across the board for all Oregonians," she said. "But there has to be a broader conversation about how we can do this, and an increase in the minimum wage — in a state with the second-highest minimum wage in the nation, tied to inflation — is not the complete answer."

The House Republicans are open to the discussion, Walker said. But the list of current legislation has them worried.

"Right now, there are a lot of small-business owners just hanging on," Thatcher said. "They're treading water. But all we're doing is spilling a bunch of rocks on their heads and saying, 'Now try to swim.' Some will go under as we pile on these additional burdens and mandates. ... It's possible, of course, it would help some people out there. But by and large, it wouldn't be a big win for the state."

The legislation

HB 2009, which would raise the minimum wage in increments over the next three years, appears to be the focus for most Democrats and advocacy groups.

As of Friday, the bill remained in the House Committee on Business and Labor with no public hearings scheduled.

But it isn't the only introduced bill pertaining to the minimum wage. Several others have been introduced, each proposing a slightly different minimum wage, from $10.75 to $13.50, to take effect in 2016 or 2017.

None of these bills has been scheduled for action.

The vast majority of Democrats who have spoken publicly on the issue have thrown their support behind HB 2009 or its counterpart in the Senate, SB 610.

Who is making minimum wage?

According to a report from the University of Oregon Labor Education and Research Center, 75 percent of Oregon's low-wage workers belong to one of five major occupations:

•Sales and retail

•Food preparation and serving

•Personal care services

•Building and grounds cleaning and maintenance

•Health care support

National estimates show that more than 88 percent of these workers are older than 20. The average age of a worker with a minimum-wage job is 35.

lfosmire@StatesmanJournal.com, (503) 399-6709 or follow on Twitter at @fosmirel