A proposed increase to Oregon's minimum wage has begun to receive plenty of attention as the Legislature prepares to consider this issue. As we discuss the minimum wage, it is important we remember this basic value: Families need jobs that allow them to support themselves through wage labor.
A series of recent Oregonian articles ("How much would a single parent gain under $15 minimum wage?" and "Why raising the minimum wage in Oregon could cost you") mentioned a report commissioned by the office of Rep. Julie Parrish, R-West Linn, office that severely distorts the impact of increasing the minimum wage. The report implied that because low-wage workers rely on public benefits to supplement their income, these workers will not see an increase in take-home pay due to decreased income from public assistance.
The report makes four flawed assumptions:
The first is that all of Oregon's low-wage workers are on public assistance. In fact, over 200,000 Oregonians in low-wage jobs do not receive any public benefits and would benefit directly from an increase in wages.
The second is that the so-called "benefits cliff" will negate increases in take-home pay for all low-income workers. As part of a study on the high cost of low wages for the Labor Education and Research Center at the University of Oregon, my colleagues and I interviewed over 40 Oregonians with low-wage jobs. The workers we spoke with said they preferred to be "self-sufficient." They knew about the "benefits cliff" all too well; they sometimes refused raises of 25 cents because it would mean the loss of critical assistance. But these workers' wages were far from $15/hour — they averaged $10.80/hour. They want an hourly wage and full-time work that allows them to support their families without public assistance.
The third flawed assumption is that Oregon will continue with the current system of allocating public benefits to low-wage workers. It is true that incremental increases could mean some families approach the "benefits cliff," but as Rep. Margaret Doherty, D-Tigard, and others have noted, legislators have the ability to change eligibility criteria and increase funding for public benefits so that families can earn a higher wage and still get the support they need until their wages are sufficient to cover basic needs.
The fourth is that the source of low-wage workers' income doesn't matter. In recent years, corporations have increased their reliance on low-wage workers to maximize profits. Because so many low-wage workers need to rely on public benefits to pay for necessities, taxpayers are effectively subsidizing these corporations to the tune of $1.7 billion every year. Increasing the minimum wage would reduce these subsidies and allow public resources to be used for critical needs like education and infrastructure.
The report commissioned by Parrish's office implies that we should not increase the minimum wage because it would hurt low-wage families. This view represents a misunderstanding of the way a minimum wage increase would work and the challenges low-wage workers face. Increasing the minimum wage will clearly benefit low-wage workers and strengthen the state's economy for all of us.