Why are wages in the Rogue Valley so low and what can we do about it?
A new research report sheds light on some of the causes and proposes some solutions.
Highly profitable global corporations such as Walmart and McDonald’s come into our valley, take our consumer dollars, and leave behind poverty wages for many of their workers.
These huge companies pay so little not because that’s all they can afford but because doing so means more profits for billionaire shareholders and bigger bonuses for top executives.
Take Walmart as an example. A detailed analysis by Fortune magazine found that Walmart could afford to raise workers’ pay by 50 percent without raising prices one penny. U.S. News & World Report presented a separate analysis reaching a similar conclusion — an average wage of $14.89 without any increase in prices.
The difference between what companies like Walmart could pay and what they do pay is money they are taking not only from workers and their families but from all of us.
It’s money that could otherwise be spent in local businesses, which in turn could pay their workers more and provide more jobs.
In addition, it’s money that taxpayers make up for by providing various kinds of public assistance that low-wage workers need just to survive because their pay is so low.
“The High Cost of Low Wages,” a new report from the University of Oregon’s Labor Education and Research Center (LERC), found that our state’s taxpayers spend over $1.7 billion per year to subsidize corporations’ reliance on an underpaid, low-wage workforce. The largest share of these deadbeat companies are large, profitable corporations in retail, fast food and health care, researchers found.
That subsidy from you and me contributes each year to the steadily increasing wealth of the members of the Walton family who inherited Walmart — a total that at last count was nearly $150 billion.
The report found that over 400,000 Oregonians — roughly 25 percent of the state’s workforce — are in jobs that pay $12 an hour or less. Nearly 197,000 workers must rely on public benefits to make up for their low pay. Researchers noted that while Oregon has one of the highest percentages of workers who have to turn to state assistance, it has one of the lowest corporate tax rates in the country.
Low wages are a major reason that the “economic recovery” has bypassed many working Oregonians and gone straight to the wealthiest, with 95 percent of the income gains from 2009 to 2012 going to the top 1 percent in income. From 2002 to 2012, the bottom three-quarters of Oregon’s income earners saw their net income decrease.
In responding to the report, the Oregon Restaurant and Lodging Association defended companies such as McDonald’s, claiming that they are just a collection of local franchises that, in turn, pay so little because they operate on small profit margins. This argument was recently rejected by federal investigators who found that McDonald’s, which nets $5.5 billion in profits per year, dictates key terms to its franchises. Excess profits flow to the top of the corporate pyramid (where the CEO makes more than $9,000 per hour) instead of staying in our communities.
Fair Shot Oregon, a coalition of community and union groups, responded to the report by calling on the Oregon Legislature to take steps in this year’s session to start addressing the low-wage crisis in our state.
Some immediate steps include raising the minimum wage, ensuring that all Oregon workers earn paid sick days, making it easier to save for retirement, and ending employment discrimination against residents who have served their time in the criminal justice system.
While corporate officials often deflect a discussion about low wages by claiming that individual workers just need to get more education, almost half of those interviewed for the new report had at least some college training, yet were not able to find better paying jobs in line with their education. Those who seek more education also are likely to end up with crushing debt.
The low-wage crisis in the Rogue Valley and across the state affects all of us, as workers, families, small business owners and taxpayers. The first step is to recognize that low wages are partly a result of conscious corporate policies that can be changed with enough grassroots pressure. The next step is to urge our public officials to take practical action now.