In the past year Seattle, San Francisco, and Los Angeles have passed $15 minimum wage laws. Some smaller cities have raised their minimum wage even higher. Unfortunately, cities in Oregon and number of other states such as Pennsylvania, Oklahoma, and New York don’t have the right to raise their own minimum wage above the level set by their state governments.
A minimum wage preemption law is basically a law that says only the state can set minimum wage rates. In states like Oregon that have these preemption laws cities, counties and other local governments aren’t allowed to set their own minimum wages. So right now, despite the fact that raising the minimum wage to $15 is massively popular in Portland, this preemption law prevents us from raising the minimum wage here in our city.
The American Legislative Exchange Council (ALEC), which is responsible for some of the nation’s worst legislative attacks on labor and the environment, has been systematically pushing for statewide minimum wage preemption laws for over a decade. In fact, ALEC even has it’s own Living Wage Mandate Preemption Act that state’s can use to save anti-worker legislators the time of having to write their own bills.
The main argument used to advocate for these minimum wage preemption laws is that a “patchwork” of minimum wage laws will be bad for businesses and the economy. Companies will flee cities with higher minimum wages for nearby towns with lower minimums. Business owners will face constant uncertainty regarding the minimum wage, and general economic chaos will ensue.
But when we look at real minimum wage increases in cities and they effects they have we are forced to come to the conclusion that these worst case scenarios are complete fabrications. One great example is the city of San Jose, CA. In 2013 their minimum wage went up to $10/hr, a $2 per hour jump above California’s statewide minimum wage, which at the time was $8/hr.
What happened as a result of San Jose’s large minimum wage increase? Did the fact that it was so much higher than the state minimum wage cause the doom and gloom scenarios that were predicted? Did businesses flee the city for greener pastures?
No. In fact, over the course of the next year the city’s unemployment rate dropped by almost 2%, new small retail business registrations went up by 19%, and the city’s restaurant industry added 4,000 new jobs.
Another great example is Seattle. Their minimum wage is now $11/hr (compared to Washington’s $9.35/hr) and is on it’s way to $15. Since Seattle’s phase in to $15 began the city’s unemployment rate has dropped to 4.3%, a full point below the national unemployment rate, and below what most U.S. economists consider to be full-employment. It is also worth pointing out that there is no shortage of new restaurants opening up in Seattle.
The belief that a “patchwork” of minimum wage laws will be detrimental holds no real weight. In fact, such a “patchwork” of wage laws already exist here in Oregon. Even with the preemption law, cities and counties are still allowed to set higher minimum wages for their own employees and for employees at companies that contract with cities. Many, like Portland, have already set higher minimum wages for these workers. For example, Portland recently passed a new Fair Wage Policy that sets a $15 minimum wage for all full-time, permanent city workers as well as for security guards, janitors, and some others who work for companies that contract with the city.
Prevailing wage laws here in Oregon are another good example of how this “patchwork” of wage laws already exists. As of 2015, the prevailing wage law sets “Basic Hourly Rates” for a number of construction occupations. Those Basic Hourly Rates are no lower than $21/hr and go as high $38.89/hr. On the reason why Oregon has a prevailing wage law, the state’s website says,
“Oregon’s lawmakers designed PWR law, ORS 279C.800 et seq., to ensure that contractors compete on their ability to perform work competently and efficiently while maintaining community established compensation standards…”
Surely Oregon’s communities should have the right to establish fair, minimum compensation standards not just for city workers or skilled laborers, but for everyone who works in those communities. Because no one who works should live in poverty.
Minimum wage preemption in Oregon was passed in 2001, and was pushed into law by Oregon’s restaurant lobby. It’s nothing more than an outright attack on working people, and on the Home Rule Authority that is enshrined in Oregon’s constitution.
While working people across the state have been been falling behind, the victims of stagnating wages and skyrocketing inflation, there are counties like Multnomah, Clackamas, Washington, Hood River, Columbia, Benton, and Lane where living wages studies show that a single parent with one child needs at least $20-23/hr to adequately house and feed her family.
There are even more counties here in Oregon like Jackson, Marion, Polk, Deschutes, Curry, Clatsop, Wasco, Yamhill, and Lincoln where a living wage for a single parent is estimated to be between $15-19/hr. Keep in mind that these numbers are based on the assumption that the person is able to find full-time work.
So while the whole state of Oregon needs a $15 minimum wage, even that is not enough in many parts of our state, and it is clearly not a simple matter of urban vs. rural divides. Almost all of the counties here in Oregon that were just listed are rural counties, There are big cities like Portland where rent and other prices have been skyrocketing out of control, by as much as four times the national inflation rate. There are also smaller cities and towns in rural central Oregon that face very similar crises.
We need to raise Oregon’s minimum wage to $15/hr, and a ballot measure was recently filed which will do just that, but we also need to repeal the anti-worker minimum wage preemption law. It serves none but corporate interests, and that law is holding back communities in too many parts of our state by preventing local businesses from benefiting from the advantages of a well-paid workforce. We need to repeal this law so that moving forward into the future Portland, Ashland, Hood River, Lincoln City, Beaverton, Hillsboro, Eugene, Medford, Salem and other cities can raise their own minimum wages to levels that actually meet the needs of working people in those communities.