Tag Archives: benefits cliff

A $15 Minimum Wage Solves the Benefits Cliff Problem in Oregon

by Justin Norton-Kertson

The Oregonian’s recent article shed’s strange light on the Legislative Revenue Office (LRO) analysis of the effects of a minimum wage increase and the “benefits cliff.” The analysis looks at a single parent with two children who gets a childcare tax subsidy. It states that while at a $12 or $13 minimum wage these families fall off the benefits cliff (meaning they actually end up losing money each month after accounting for the public benefits they will lose as a result of having a higher income), a $15 minimum wage leaves these families with about $50 per month extra after accounting for the public assistance benefits lose.

The Oregonian’s article come with a massive, super-sized font headline about ONLY having $49 extra with $15 minimum wage, as if this is a reason to leave the minimum wage in Oregon at a poverty level. The article focuses entirely on the grossly hyperbolized notion that if the minimum wage goes up people will actually lose money.

The article misses the real point entirely, it fails to come to the glaringly obvious conclusion that a $15 minimum actually solves the benefits cliff problem. It puts people on top of the cliff, while anything less leaves families falling off the cliff. With a $15 minimum wage working people in Oregon will have the dignity of being able to provide adequate housing, food, and health insurance for their families without having to rely on taxpayers for assistance. It even leaves these families with a little left over at the end of the month. This is important, because working people deserve dignity. No one who works should live in poverty.

The University of Oregon’s Labor Education and Research Center (LERC) just released a report addressing this exactly issue of Oregonians on public assistance. The report shows that taxpayers in Oregon spend over $1.7 billion per year to subsidize the poverty wages of massively profitable corporations by paying for the public assistance that goes to those corporations’ low-wage workers. Raising the minimum wage to $15/hr will reduce the amount that taxpayers are spending to corporate low wages. We can then use that freed up money to fund public education, or provide affordable housing, or help fund single payer healthcare for all Oregonians.

The LERC report also found that 400,000 workers in our state currently work in low-wage jobs, and that 197,000 of them received public assistance. That means that there are hundreds of thousands of working Oregonians who make less than $15/hr and DID NOT receive public assistance. They would benefit directly from an increase in wages. For these workers the benefits cliff does not exist. They will have much more than $49 extra at the end of the month when we increase the minimum wage $15/hr. 

What the LRO report shows is that $15 is the right number for Oregon’s minimum wage. Families can’t survive on $9.25. A $12 or $13 minimum wage is still a poverty wage here in our state, and would leave families falling off the benefits cliff. Only a $15 minimum wage is enough to prevent families from falling off the cliff while giving working Oregonians the dignity of earning a wage that allows them to provide for their families. Oregon needs a raise. Oregon needs $15 Now.

Help us win $15 for Oregon by donating to the campaign or becoming a volunteer!