Minimum Wage Hike
Bosses hate it, workers scrape by
by Jessica Hirst

When minimum wage rose 45 cents at the beginning of this year, Jerry James knew that while the increase wouldn’t allow his family to get ahead, it would at least give them a leg up with rising costs. 

“It’s good,” James said. “But with the cost of food, it sort of weighs itself out.” James and his wife, both clerks at the Neighborhood Deli & Market in Whiteaker, support two children on their minimum wage jobs. 

Even with the wage increase, James said that living on what they both make isn’t easy. “You have to do anything else you can to get by,” James said. In his case, he does a little tattooing on the side. “It doesn’t seem to work with just one job,” he said.

On Jan. 1, Oregon’s minimum wage increased from $7.95 to $8.40. Each year, as mandated by Measure 25, Oregon’s minimum wage increases in proportion to inflation. The increase reflects the cost of living as defined by the August Consumer Price Index (CPI), which jumped 5.4 percent between 2007 and 2008. Measure 25 was approved by voters in 2002, passing by a narrow 2 percent margin. 

Oregon currently has the second-highest minimum wage in the nation, 15 cents behind Washington state. The federal minimum wage is $6.55. 

The 2009 wage increase will allow full-time minimum wage workers to increase their annual income from $16,536 to $17,472, an extra $936 a year. Still, the extra $3.60 a day might not be enough to keep up with the rising cost of food. Last fall, the Oregon Center for Public Policy (OCPP) reported that in the 12-month period ending last August, the cost of food and gas rose more quickly than the average cost of goods and services reflected by the CPI. 

The OCPP estimated that during that period, the price of food rose 7.5 percent and the cost of fuel 36 percent. “Many Oregonians are hurting from rising food and gas prices, but the pain is greater for low-income workers,” said OCPP policy analyst Michael Leachman. “A larger share of low-income workers’ overall spending goes to cover these two necessities, compared to the spending of better-paid workers.”

The price of gas has declined since last year, but it doesn’t necessarily bring peace of mind to low-wage workers. “The price is down, but you never know when it’s going to go back up,” said James.

Glenda Carroll, a full-time employee at The Salvation Army, paused long enough from hanging clothes on racks to reflect on this year’s wage increase. “Of course, we think it’s wonderful. Anything extra will help,” she said. “But then, how much are you really left with when they’re done taking out taxes?” she added. 

Another worker, a cashier at Adult Shop who declined to be named, said that she makes “just over” minimum wage, and that she received a 25-cent-per-hour raise at the beginning of the year. She said that while she welcomes the raise, it’s still “difficult” to live on what she makes. “I rent a room for $250 a month, and I’m still $6,000 in debt,” she said.

Although the wage increase helps low-wage workers keep up with inflation, lobbyists for some employers complain that it reduces their profits. Farming and restaurant lobbyists are particularly fervent opponents of Measure 25. 

Farming industry lobbyists say that Measure 25 puts Oregon’s farms at a competitive disadvantage with other states. They also say that the formula for calculating Oregon’s minimum wage increase doesn’t take into account the lower cost of living in rural areas. 

The farming industry also contends that agricultural goods, unlike other products, can’t be priced highly enough to compensate for the increased wages. 

Lobbyists from the Oregon Restaurant Association (ORA) say that the yearly wage increase threatens jobs. The ORA has announced that it will push the 2009 legislature to end the automatic, CPI-based increase. The ORA also argues that the state’s formula for increasing minimum wage should account for tipping, which it currently does not.

But the Center for Public Policy contends that claims by the employer lobbyists don’t match reality. OCPP says that Oregon’s restaurant and farming industries have flourished since 2002, when Measure 25 passed. From 2002 through this year, Leachman said, the number of restaurant jobs in Oregon has grown by nearly 21 percent — more than double the state’s overall non-farm job growth rate. 

Oregon’s net farm income nearly tripled from 2002 through 2007, growing faster than national farm profits over the same period, Leachman said.

Stories in the mainstream press, including The Register-Guard and local TV news, have focused almost entirely on complaints from bosses, not minimum wage workers struggling to survive. 

But Leachman points out the need for workers to keep up with inflation. “The lowest-paid workers would be much worse off without the (wage hike),” he said. “We should be thankful that Oregon is a national leader in raising the floor on wages.”