Oregon is under pressure from unions and minimum wage hike advocates. Two ballot initiatives threaten to push the state in different directions and to change the authority over those wages. However, one legislator wants to “split the baby” so speak by proposing three minimum wages, which is being presented as a way to mollify everyone.
There are two ballot initiatives to raise Oregon’s minimum wage. One initiative being pushed by unions rises the state’s minimum wage to $13.50 and gives cities the authority to push their minimum wages even higher. The other ballot initiative would hike the state’s minimum wage to $15 by 2019. Currently, there’s a statutory prohibition on municipalities raising their minimum wage.
Democratic state senator Michael Dembrow, who chairs the committee on workforce issues, wants to avert a repeal of the state’s ban on municipalities raising the minimum wage as well as future battles over minimum wage hikes by setting three regional minimum wage rates. The Portland metro area would have the highest rate and rural areas the lowest. The raises would be phased in over three to four years.
The idea is that a tiered approach would addresses higher costs of living in and around Portland, but not be crippling to businesses in less populous outer areas that would either have to cut staff or raise prices to adjust to a higher wage – an issue that economists highlight as an unsavory, unintended consequence.
The Portland Tribune reports:
“Our hope is if we can pass it in February, that the campaigns will stop collecting signatures, and they’ll feel comfortable with it,” Dembrow said.
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"What became clear from that was we needed to do something that is not one-size-fits-all,” Dembrow said. “We needed to take into account cost of living and economic vitality in different parts of the state.”
Dembrow said he envisions setting three regional minimum wage rates – with the highest rate in the Portland metro area and the lowest in rural areas.
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“If Portland does raise the minimum wage, and Beaverton doesn’t, there is a concern a lot of businesses would relocate,” Dembrow said. “We have had a lot of experience with the state setting its own minimum wage but haven’t had a lot of experience with cities doing it. That is a relatively new phenomenon.”
How far this bill will advance when the state legislature is back in session in January is a big question.
While this certainly avoids the one-size-fits-all, it would be horrendously complicated and whatever tier a section is in the effects of raising the minimum wage–typically higher unemployment–would likely still prevail–albeit at three different rates. This "solution" looks like it is too clever by half–or make that by three.