Workers in Oregon are seeing bigger paychecks this month after minimum wage rose to $10 per hour in rural areas on July 1.
The 50 cent hike is part of a 2016 compromise to slowly phase in a series of wage increases tied to geography. By 2022, the “standard” wage will be $13.50 an hour, while Portland workers will make $14.75 and rural employers will have to pay at least $12.50 an hour. When the bill was passed last year, the minimum wage across the state was $9.25.
Workers around the country have been pushing for a $15 per hour minimum wage, but the state put the more modest measures into place to soften the blow for businesses.
Cherie Bumpaous, owner of the Pheasant Blue Collar Bar and Grill in Hermiston, said this month’s 50 cent increase still has an impact on small local businesses and their clientele. She said what many people don’t realize is that an increase in wages also means an increase in taxes and benefits that the employer has to pay out as well, expanding the total cost of the raise beyond 50 cents.
“Of course it’s going to trickle down to the customers,” she said. “A nickel or dime you can absorb, but 50 cents you really can’t absorb.”
That means higher prices for customers.
If everyone paying minimum wage to at least some of their employees raise their prices on consumers, Bumpaous said the raise won’t make a bottom line difference in the personal budgets of minimum wage workers.
Melissa Troppmann, who tends the bar at the Pheasant, tended to agree with her boss’s assessment.
“I think it’s all going to get eaten up in taxes,” she said.
She did say she didn’t think that higher prices as restaurants and bars due to the increase would necessarily cause people to leave smaller tips, however.
“It hasn’t in the past,” she said.
While most people think of minimum wage workers as inexperienced teenagers, Troppmann is married with children and joked she has worked at the Pheasant for so many years she is “part of the furniture.” The median age for minimum wage workers is 25, compared to 42 in the general workforce, according to the Oregon Employment Department.
Some workers are excited for the new increase.
Audra Arias, who works in housekeeping at Oxford Suites in Hermiston, said after 10 years with the hotel she makes more than minimum wage, but when the new housekeepers get a minimum wage bump, the more seasoned employees usually see a corresponding raise to keep them from sliding back down toward the minimum.
“I live paycheck to paycheck, so this is going to be helpful for me,” she said.
According to the Bureau of Labor Statistics, about 63 percent of minimum wage workers are women. Arias is single but raising her nephew, and she said many of her co-workers are single moms or married women who are working because their family needs two paycheck to make ends meet. She said she feels a minimum wage increase is especially good for women and could help address some of the pay gap between the genders.
“I’m glad they’re doing this for Oregon,” she said.
According to the Oregon Employment Department, the new minimum rule will increase wages for about 14 percent of jobs in the state. The department estimates that 4,209 workers in Umatilla County and 435 workers in Morrow County were directly affected. It is unknown how many jobs may have been indirectly affected by an employer deciding to give comparable raises to workers above the minimum, or by reducing their labor force.
Nakul Butta, manager of the Rodeway Inn in Hermiston, is one of those employers who has been paying his employees above the minimum but will be affected as the minimum wage continues to jump by 50 cents each year.
He said he prefers to have the discretion to give his employees raises based on their achievements, rather than being directed by the government to give them a raise whether their performance has improved or not.
Butta is part of the Asian American Hotel Owners Association, and said he has discussed Seattle’s new $15 minimum wage with fellow association members who own hotels there. The city’s minimum wage was $9.47 in 2014 when the city council voted to ratchet it up to $15 by 2017.
Butta said hotel owners there have told him they cut their employees’ hours back, or cut employees altogether, when the first increases hit. Many then raised their prices when it went from $13 to $15 this year for large employers that do not provide health insurance. Employers that do provide insurance will see a similar increase in 2018.
“The quality of work is not getting better,” Butta said. “The quality of employees is not getting better.”
While much has been made of kiosks at places like McDonald’s replacing workers when they get too expensive, Butta said even hotels are finding ways to replace their workers with machines. Hiltons now send people a digital “room key” on their smartphone instead of having them check in with a live person at the front desk.
Some studies have determined that Seattle’s large wage increases have not had a noticeable affect on the number of minimum wage jobs available. But a recently published study by researchers at the University of Washington found that workers’ hours had decreased by an average of 9 percent, resulting in smaller paychecks than they had been taking home before the wage increase. Studies on both sides of the equation have been called into question by proponents and opponents of the Fight for $15, and it’s too early to say what the overall effect of the 2017 increase has been.
Federal minimum wage has been $7.25 since 2009. Oregon is one of seven states that currently has a minimum wage of $10 or more in an effort provide a “living wage” that helps those working full-time avoid having to rely on government assistance despite having a job.
The new minimum wage in Oregon seems to at least be helping workers keep up with inflation that might otherwise price them out of their apartments. The Oregon Employment Department reported last year that the “purchasing power of Oregon’s minimum wage today is similar to the purchasing power of the minimum wage in the late-1970s, while nationally the minimum wage has lost purchasing power.”
Contact Jade McDowell at email@example.com or 541-564-4536.