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Minimum wage climbs 15 cents

While some organizations believe the wage is still too low, local business owners raised concerns about it going too high


The new year has ushered in another increase in Oregon's minimum wage from $8.95 to $9.10 per hour, a $312 annual boost to a full-time wage earners' paycheck.

The 15-cent adjustment affects 100,000 workers and, according to the State of Oregon's Bureau of Labor and Industries (BOLI), will generate more that $20 million in new economic activity for the state.

Ericksons Thriftway Store Manager John Amodeo, however, said that every increase in the minimum wage requires a downward adjustment in his workforce.

Explaining that the store's labor cost is calculated as 10 percent of gross sales, Amodeo said that any increase would require a reduction in man hours.

"We are not constantly increasing product prices," said Amodeo, "so an increase in labor costs requires us to adjust."

When it comes to adequately compensating workers, the Oregon Center for Public Policy (OCPP) argued that the 2014 adjustment is still not enough to make ends meet. The center estimates that it would take a wage of $9.55 per hour to take a family of three, with one working parent, out of poverty in 2014.

"Despite the federal poverty level being a very low bar, the minimum wage is still sometimes not enough to lift a family above that level," said Jason Gettel, policy analyst for OCPP.

However, Greg Lambert, founder and president of Prineville-based Mid Oregon Personnel, believes that the minimum wage is improperly interpreted as a living wage, and should be seen, instead, as entry level income.

"The more expensive it is for employers to hire new workers, the fewer will be hired, ending up hurting the very people it is designed to help," he said.

Amodeo agreed, saying that the increase makes it more difficult for students, and other kids, to get a job and make some money.

"Adults are now taking minimum wage jobs due to the economy, and the fact that the minimum wage is getting higher," he said.

Oregon, one of 21 states whose minimum wage exceeds the federally-mandated $7.25 per hour, ranks second overall behind Washington's $9.32. Because of the mandated wage, Oregon has less than 2 percent of its hourly workers earning less than the federal minimum.

The increase is tied to Oregon's Ballot Measure 25, passed in 2002, which requires the annual adjustment based on the Consumer Price Index. In its first year, the wage went from $6.50 to $6.90 per hour and has increased by $2.60 since.

Lambert fears that in the face of increasing labor costs, automation will become more attractive.

"How many people do you not have to hire, in order to pay for a machine?" Lambert asks. "When you raise the cost of hiring, there will be fewer employees."

The Center for Economic and Policy Research found, however, that in the past 20 years, there has been no indication of any significant employment response to modest increases in the minimum wage.

Although they disagree with the increase, neither Lambert nor Amodeo feel it will seriously impact their business.

"All of our clients pay more than the minimum wage now," Lambert said.

Amodeo added that only about 25 percent of his work force is paid minimum wage.

"Even if they all worked 40 hours per week, it is not a large adjustment," he said. "But, it is a cost of doing business."



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