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Raising minimum wage isnt the answer to Oregons economic woes

Oregon Labor and Industries Commissioner Brad Avakian announced last week that Oregon's minimum wage will increase from $8.95 per hour to $9.10 effective Jan. 1, 2014.

We have no problem with Avakian's announcement since the Oregon State Legislature has chosen to tie the minimum wage to the cost of living.

However, we have serious reservations about the claims that Avakian made in his press announcement.

"Oregon can build a stronger economy by making sure that workers have the purchasing power they need to keep pace with the rising cost of everyday goods," he stated. "With this increase in Oregon's wage floor, nearly 100,000 Oregonians will earn more money for groceries, school supplies, gas, and other household essentials. That's good not just for individual workers, but for our state's economy.

The Oregon Center for Public Policy agreed with Avakian, releasing a statement that said, "More money in the pockets of low-income workers helps the local economy. No family with a full-time worker should be poor. A higher-wage floor would be an even greater benefit for all workers and Oregon's economy."

The reality is that Oregon already had the second-highest minimum wage in the country behind only Washington state prior to the announcement. In addition, unemployment in Crook County is languishing at 12.6 percent.

More importantly, minimum wage jobs were never intended to lift a family out of poverty. Rather they were intended to give individuals with limited work experience and skills the opportunity to develop skills and a work history so that they are better able to advance.

Add to that the fact that businesses pass increased costs on to consumers in the form of higher prices and we will all be paying more for basic goods and services, minimizing the benefit that those seeing a raise will actually get.

Raising the minimum wage may indeed help a small group of Oregonians. However, with nearly 13 percent of Crook County residents out of work and many of the rest not having seen a raise in years, the wage increase will merely raise the costs of goods and services for average citizens.

As John Charles, president and CEO of Cascade Policy Institute said, "No one in the government has any clue what the proper and appropriate wage should be in all circumstances."

As an example, Charles noted that interns can work for a company for free, but it is illegal to pay them unless you offer at least minimum wage

We absolutely need to address the problem of poverty in Oregon, but raising the minimum wage is not the answer. More and better jobs is the solution. A mandatory minimum wage restricts employers from being able to bring on more, low-skilled workers who might be looking to get experience as they work their way up to higher paying positions.

It is time for the Legislature to seriously look at Oregon's minimum wage policy. Giving a small group of Oregonians a mandatory raise during a stagnant job market is not the answer.




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