RURAL PERSPECTIVES ON MINIMUM WAGE AND REGIONAL ECONOMIES

A collaborative project of North Star Civic Foundation Northwest Health Foundation

December 18, 2015

[ 1 ] THANK YOU

This project relied heavily on the willing partnership of our local community hosts, Kathryn Brown, Mike Dickerson, Sue Kupillas and Turner Waskom. In Astoria, Pendleton, Bend and Medford they helped to identify problem solvers and thought leaders to participate in our conversations. We also would like to recognize the many individuals along the way who offered advice, ideas, context and fair warning as we set out on this project. The list (which is surely missing one or two wonderful people) includes: Andrea Miller, Andrea Paluso, Anna Kuhn, Anne Koubisch, Ashley Henry, Barbara Dudley, Bev Stein, Brian Surrat, Christian Gaston, Cheryl Myers, Chris Beck, Craig Smith, Deborah Kafoury, Doug Stamm, Duke Shepherd, Earl Blumenauer, Gun Denhart, Jack Graves, Jack Gray, Jamie Partridge, Jason Conger, Jeremy Rogers, Jim White, John Berdes, John Haines, John Horvick, John Tapogna, Josh Alpert, Josh Lehner, Karla Chambers, Karly Edwards, Ken Thrasher, Leslie Carlson, Marissa Madrigal, Martha Choe, Maud Daudon, Nancy Hamilton, Nancy Straw, Natalie Reitman-White, Nick Beliciks, Nik Blosser, Nolan Lienhart, Paul Sonn, Raahi Reddy, Ramon Ramirez, Ryan Deckert, Sarah Joannides, Sally Yee, Scott Cooper, Sheila Martin, Stephen Michael, Steve Forrester, Sue Levin, Susan Hammer, Tim Nesbitt, Wendy Willis, Willie Smith, and Zeke Smith . . . Whether it was a five minute phone call, a willing ear, or a word of caution – you each helped tremendously. Thank you! Finally, this would not have been possible without the sincere engagement of hundreds of people around the state. As Caitlin asked Jesse in the middle of the road trip – “What would you give four hours of your day to that isn’t at the top of your own priority list?” The generosity that so many people brought to this project was astounding and humbling.

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | [ 2 ] [ 3 ] RURAL PERSPECTIVES ON MINIMUM WAGE & REGIONAL ECONOMIES

Northwest Health Foundation and North Star Civic Foundation joined together in 2015 to North Star Civic Foundation and Northwest Health Foundation hosted listen to business and community leaders conversations and listening sessions with more than 100 employers and community leaders in several Oregon communities. [Map shows in six Oregon communities and gather county names, prevailing wage district numbers, and local workforce concrete ideas and community-informed Columbia area names. We hosted listening sessions in the shaded areas.] Clatsop 1 - NW OR solutions around a proposed increase in 1 - NW OR the minimum wage in 2016 or 2017. Nearly 1 in 6 Oregonians lives Umatilla Washington Hood River 12- Eastern Wallowa in poverty, and 2 in 5 can’t Multnomah 13 - Eastern Tillamook 2 - Portland-Metro 2 - Portland-Metro 9 - Central afford to pay for basics such as 1 - NW OR Gilliam Morrow Sherman 12 - Central 12- Eastern housing, transportation and food 9 - Central Union without public assistance. Yamhill 13 - Eastern 3- Mid Valley Clackamas Wasco 2- Clackamas 9 - Central According to our research, changes to

Marion minimum wage policy are likely to take Polk 3- Mid Valley place in Oregon in 2016 or 2017, by the 3- Mid Valley Wheeler legislature or by the ballot. These changes 12 - Central Baker Jefferson 13 - Eastern will have an impact throughout the state – Lincoln 10 - Central 4 - NW OR Linn on low-paid workers and their families, and Benton 4 - Mid Valley 4 NW OR Grant also on individual businesses and regional 12 - Eastern economies.

Crook Both of our foundations support an increase 10 - Central in the minimum wage as one component of a statewide effort to reduce poverty and Lane Deschutes 5 - Lane 10 - Central help all communities flourish. We engaged in this listening process to inform our own positions on current proposals to increase the minimum wage.

Addressing prosperity, health and wealth at a statewide level and across generations is not a single-policy effort. The purpose of this report is not to address the full range of Douglas Malheur activities that might increase prosperity in Oregon. Instead, 6 - SW OR 14- Eastern Coos Harney we focus on the opportunity to raise the minimum wage in 7 - SW OR 14 - Eastern a way the responds to the experiences of rural employers and community leaders. Lake 11 - Central All too often fast-moving policy change develops without input from rural areas. In our process, we hoped to hear Klamath reactions to the proposed minimum wage increases, and 11 - Central Curry Jackson gather concrete ideas about how the proposed changes 7 - SW OR 8 - Rogue Valley might specifically affect rural employers and communities. Josephine 8 - Rogue Valley We believe that these ideas, stories, and considerations are valuable for understanding both the big picture question of how to increase prosperity throughout Oregon, and also the immediate question of how increasing the minimum wage may affect local communities – and specifically employers. Although both of our foundations strongly

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | [ 4 ] [ 5 ] believe that workers’ voices must be heard, we also see that guilty of getting to solutions without more voices at the seeking out employers themselves – not industry lobbying table. The diverse perspectives chronicled here and our groups – can help to define the problems that policy needs own analysis are critical to forming a complete picture of TOP TAKEAWAYS: SLOW AND REGIONAL to solve, and elevate possible solutions. where the opportunities and challenges to the minimum wage are in 2016. SOLUTIONS PREFERRED The Oregonians we met are not a scientific sampling of the state. They are individuals who local communities leaders Over the course of these months, more than 100 individuals identified as “problem solvers” and as people who could and businesses met with North Star Civic Foundation, Northwest Health Foundation, or both. This report offers a see all sides of an issue. They were primarily employers, 1. Oregon business leaders, employers and community leaders although most of them were also employees. In rural summary and chronicle of those conversations – both the areas, many of the people we met wore several hats – small data that we shared with participants and the stories, ideas, strongly believe that the legislature is the right place to address the business owner, part time employee and local nonprofit and solutions we heard from them. complexities of increasing the minimum wage. leader all wrapped in one. LISTENING, NOT ENDORSING 2. For both urban and rural participants, the concepts of The Oregonians who participated in these conversations local control or are broadly concerned about poverty in their This summary of those conversations is meant to offer a a regional wage seemed superior to a flat statewide increase. communities. They are particularly saddened, frustrated, venue for voices that add unique perspectives in the policy and overwhelmed by challenges to finding affordable making process. We offer the perspectives and experiences 3. For most participants, the timing of policy implementation was the housing and childcare. They worry about neighbors of people we met throughout the state in their own words. most important factor. A “phase in” period over 3-4 years gave many Sharing these perspectives does not mean that either of in their communities who are experiencing addiction, employers a sense of relief. Additionally, many employers preferred homelessness, mental illness, and intergenerational our foundations agrees or disagrees with them. the idea of a slower “path” to a higher wage over other kinds of poverty. By the same token, we also recognize that participation One thing that became clear in all of our conversations in these listening sessions does not indicate that some or mitigation, such as different wage floors or an exemption. any of the participants endorse the findings of this report, is that each of us – liberal, conservative and libertarian, 4. All participants agreed that it would be complex for their own employer, employee and self-employed – connect deeply or of the policy options that were developed during the and personally with the idea of work and the inherent conversations. business to adapt to a changed wage floor. Some focused on those dignity in earning a living. We started each conversation complexities as a reason to avoid the change, while others saw the with a round of introductions focused on what our parents EXECUTIVE SUMMARY complexities as opportunities to improve the public policy at the and caretakers had done to earn a living when we were North Star Civic Foundation and Northwest Health children, and how we had each earned our first paycheck. legislative level. Foundation found that Oregon must increase the minimum We heard many, many stories about picking strawberries, wage as part of a larger effort to address increasing levels mowing lawns, delivering newspapers and helping parents 5. Many participants had prepared some level of internal analysis of how of poverty among working Oregonians. with odd jobs on farms, family-owned rental properties, increases would affect their own businesses and employees. They were and at the family store. We also believe that Oregon’s diverse regional economies already taking steps to prepare for a change. require an innovative minimum wage solution. This solution Another reality that became clear immediately is that should address the complexities of an interdependent but people are committed to finding a solution to this set of 6. The majority of the people we met lacked basic facts about the current uneven state economy. interconnected issues. Each of the listening sessions in political proposals. As one example, the majority believed that a six communities commanded four hours. The owners and There is no denying that hard working people struggle $15 per hour minimum wage might go into effect in the next year. managers of a wide variety of companies, local school to make ends meet in every county in Oregon. But in districts, city governments, nonprofits, and small restaurants the greater Portland area the need to raise the minimum This belief deepened antagonism and disrupted dialogue until it was made the time to join us and generously shared their time, wage is urgent and immediate. In other parts of the dispelled. concerns and ideas. For that we are very thankful. state a slower path toward a higher wage may be more appropriate, both as a measure to address local needs and 7. Many participants had heard and accepted common misinformation PROCESS as a way to protect rural economies that are still emerging about the effects of a minimum wage increase. (A summary of these from the recession. In March 2015 North Star Civic Foundation began points is included at the end of the report.) There was a general engaging urban, rural, and suburban community members The rural employers and community leaders we heard from distrust that economic studies and data reflect the rural experience. to hear their thoughts and concerns about minimum preferred a regional approach or an opportunity for local wage policy that was being proposed in Oregon. North control instead of a policy that would set the minimum 8. Oregon business leaders, employers and community leaders are Star specifically reached out to employers who would be wage as a single high number across the state. As one directly affected by a possible increase in the minimum participant succinctly observed, “There are already two or deeply nervous about the levels of poverty in Oregon, and also about wage and community leaders in rural areas. We paired three regional economies. This isn’t a real change.” possible solutions. They fear that proposed solutions won’t do enough these interviews and small group discussions with impartial Participants in these conversations also felt strongly to solve the urgent problems faced by their neighbors, employees, research and analysis of regional cost of living and and with a near consensus that policy as complex as the indicators of economic health. Together, these in-person and families, and they fear unintended negative consequences in minimum wage should be legislated by elected leaders, interviews and relevant data have shaped our thinking complex and inter-dependent economies. Expressions of this anxiety not at the ballot. Although the purpose of the listening about what kinds of public policy related to minimum wage sessions was not to develop a shared policy position and frustration permeated most of the conversations we led. were pragmatic, positive, and possible in the near future. among participants, it was notable to both Jesse Beason In July, Northwest Health Foundation joined as a partner in from NWHF and Caitlin Baggott from NSCF, and also to our 9. A genuine willingness to work together across partisan and the process of listening to rural employers and analyzing local hosts, that participants were largely aligned around ideological lines to solve complex problems is alive and well in all the information in order to shape their own perspective on the strong belief that the legislature should act in February communities in Oregon. the issue. We know that health and economic opportunity 2016. are intertwined. We also know that too often, we’ve been

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | [ 6 ] [ 7 ] CONTENTS RURAL PERSPECTIVES ON MINIMUM WAGE & REGIONAL ECONOMIES 5 • EXECUTIVE SUMMARY

AN INTRODUCTION TO THE TOPIC 11 • COST OF LIVING • COMPARING MINIMUM & MEDIAN WAGES • POLITICAL CONTEXT

WHAT WE HEARD 15 • “In my heart, I know I couldn’t live on the minimum wage.” • “It is urgent that the legislature get out in front of this.” • “This is going to be a job killer.” • “You can’t really expect business to bid against itself can you?” • “I don’t care if you pay $100 an hour. There are no jobs.” • “It would take me about a year to figure this out.” • “Maybe Walmart should pay more.” • “The real problem is . . . “ • “We often complain that Portland doesn’t listen to rural.” • Key Low-Paid Industries • “This whole industry is built on the minimum wage.” | Restaurants • “Please don’t exempt us.” | Agriculture • “A lot of the people who work here are a paycheck away from being a client.” | Non-Profit Sector

POLICY OPTIONS 23 • REGIONALISM • AUTHORITY • UNIFORMITY • EQUITY • CALIBRATION • MITIGATION

Priorities 29 • APPENDIX A: MINIMUM WAGE MYTHS & REALITIES • APPENDIX B. CURRENT MINIMUM WAGE JOBS IN OREGON, BY RATE AND INDUSTRY • APPENDIX C. STATE AND LOCAL MINIMUM WAGE SCHEDULES • APPENDIX D: SEATTLE MINIMUM WAGE • APPENDIX E: PARTICIPANTS, INTERVIEWEES AND CONVERSATIONS

BIBLIOGRAPHY 37

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | [ 8 ] [ 9 ] Comparing Cost of Living Data Sets AN INTRODUCTION TO THE TOPIC At the beginning of each conversation, we shared basic Figures 1 through 3 show three approaches to understanding cost of living in Oregon. Each analyzes local data to show WorkSystems Inc report on the 2014 Self Sufficiency Standard: what it costs in each region to pay for basic needs. information about Oregon’s economy with the participants. We focused on two sets of data that economists see as key “In Oregon, the amount needed to be economically self-sufficient Fig. 1: 2014 Family Budget Calculator, Family of 4. Data at MSA level. Source: Economic Policy Institute factors for setting a responsible minimum wage: (1) The varies considerably by geographic location. For instance, the $20 cost of living and (2) the relationship between the minimum amount needed to make ends meet for one adult and one wage and the local median wage – what we’ll call the preschooler varies from $11.73 per hour ($24,765 annually) Targeted Range throughout this report. in Malheur County to $22.54 per hour ($47,571 annually) in Washington County, or from 157% of the Federal Poverty $16 COST OF LIVING Level to 302% of the Federal Poverty Level. “ (pp. 54-57) Cost of living has been a central part of the conversation about minimum wage. Two campaigns to increase the $13 minimum wage have both pointed to rapidly increasing COMPARING MINIMUM & MEDIAN WAGES Economists look at the relationship between the minimum 2014 Family Budget Calculator / Family of 4 costs of living throughout the state as a primary justification Economic Policy Institute for raising the minimum wage. wage and the median wage as a rough indicator of what range of wages the labor market can bear. $9 The Federal Poverty Level in Oregon is $24,250 for a Wage needed to cover regional costs of housing, family of four. The current minimum wage of $9.25 is the Or, to be more precise, they use it to record and observe food, child care, transportation, healthcare and taxes. equivalent of $19,240 per year before taxes. what minimum wage is normal (prevalent in many economies) and what is outside of our current economic The charts on the opposite page show alternative measures literature (uncommon or not seen in any economies). Linn Polk Lake Lane Coos Curry Grant Baker Union Crook of cost of living. In order to compare apples to apples, Wasco Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman

Columbia Economists observe that the “normal” – or statistically Tillamook Je ff erson these charts are each based on a few assumptions: Josephine Deschutes Clackamas Hood River Multnomah Washington average – scenario worldwide is one in which the minimum Fig. 2: 2015 “Rental Wage” for a 2 Bedroom Apartment. Data at county level. Source: National Low Income Housing Coalition (Fig. 1 line added for comparison.) • The charts are based on an imaginary family of four, wage is about half of the median wage in a region. in which both parents take home equal pay. $20 Economists also observe economies in which the minimum • The charts assume this family of four has a child in wage is as high as 65% of the median wage. public school and a child in daycare. In his recent Brookings Institute/ Hamilton Project paper $16 • In all charts, the counties are organized by local “Proposal 13: Designing Thoughtful Minimum Wage Policy median wage from lowest (Coos) to highest at the State and Local Levels,” Arindrajit Dube frames the (Washington). range broadly:

$13 The Living Wage Calculator | Fig. 1 “When this ratio is low—say around 0.2 [20%]— minimum wage policy is not raising the wages 2015 Rental Wage / 2 Bedroom The Economic Policy Institute provides national analysis and of many workers. In contrast, a high ratio—say National Low Income Housing Coalition data for economic policy. Their living wage calculator for a around 0.8 [80%]—indicates a highly interventionist $9 family of four is based on regional data. They show that a policy where the minimum wage is dramatically Wage needed for rent to make up 30% of household budget. worker in Clackamas, Multnomah and Washington Counties compressing differences in wages for nearly half needs to earn more than $16 per hour to cover the local the workforce.” costs of housing, food, child care, transportation, health care and taxes. As Figure 1 shows, rural counties have a lower Figures 4-7 on the next page show a tighter range – from Linn Polk Lake Lane Coos Curry Grant Baker Union Crook cost of living. In more than half of rural counties each parent in 50% to 65% of current median wage, instead of 20%-80%. Wasco Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman Columbia Tillamook Je ff erson the family would need to earn more than $13 per hour. We chose the low and high ends of this Targeted Range to Josephine Deschutes Clackamas Hood River Multnomah Washington respond to the following: Fig. 3: 2014 Self Sufficiency Standard, Family of 4. Data at County Level. Source: Univestiory of Washington Center for Women’s Welfare. (Fig. 1 & 2 lines added for comparison.) The Rental Wage | Fig. 2 • The low end is based on The Economists’ $20 The National Low Income Housing Coalition presents an straightforward advice to governments seeking to 2014 Self Sufficiency Standard / Family of 4 annual analysis of the cost of rental housing on a county- increase the minimum wage: “Ensure that the level is University of Washington / Center for Women’s Welfare by-county basis. Their 2015 Rental Wage for Oregon shows pretty low—say, less than 50% of the median,” and on $16 significant discrepancies between different counties.Figure the observation that 50% is the international average. Wage needed to cover county level 2 maps the rental wage on top of the living wage calculator • The high end is based on the higher range observed costs of housing, food, child care, showed in Figure 1. It shows the steep price of rent in in advanced countries in which the minimum wage is transportation, healthcare and taxes. Clackamas, Columbia, Multnomah, Washington and Yamhill as high as 65% of the median wage. $13 counties, where each parent in our fictional family would need to earn $18.15 per hour in order to keep the cost of Which Median: Regions and Employees rent below 30% of their household budget. While international and historic economic data place $9 Self Sufficiency Standard | Fig. 3 the minimum wage at 50%-65% of the median wage in many advanced economies, different sets of wage data The Self Sufficiency Standard is an alternative to the Federal show slight differences in what the median wage itself is, Poverty Level, developed almost twenty years ago by depending on which workers are included and what region Linn Polk researchers at the University of Washington. Figure 3 shows is used. As a general observation, when the median is Lake Lane Coos Curry Grant Baker Union Crook Wasco Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath the Self Sufficiency Standard for a family of four. The Self Wallowa Malheur calculated based on a region that includes both urban and Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River Multnomah

Washington Sufficiency Standard calculates the cost of living for many rural areas, it tends to be lower than when it is calculated at family types in each county in the state. the city or county level.

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | INTRODUCTION [ 10 ] INTRODUCTION [ 11 ] Fig. 4 2015 Oregon Median Wage, averaged at Local Workforce Area. Source: OED $20 Figures 4-6 to the left show examples of this: Median wage Hood River County is a stark example of this. Columbia and paid jobs. In short: Where are most of the low-paid jobs in averaged at the local workforce area, at the county level Lane Counties are in similar positions. Oregon? $16 for all workers, and at the county level only for full-time We did not have that data to share at the time, but were workers. Each one is slightly different than the others. $13 POLITICAL CONTEXT able to put together Figure 10 after the listening tour Insteading of choosing a single indicator, we have shown In conversations throughout the state we shared this data ended. $9 them layered on top of each other to demonstrate how in the context of two active ballot measure campaigns. We used $15 as the threshold for defining “low paid” jobs each measure offers a slightly different reflection of the Both campaigns are aimed at increasing the minimum because any increase in the minimum wage would likely local economy – but also how similar they are. Figures 4-6 Linn Polk Lake

Lane wage between 2017 and 2019. Figure 9 shows the same Coos Curry Grant Baker Union Crook Wasco Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow have an effect on jobs up to $15 per hour. 44.9% of jobs Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River

Multnomah show a basic trend pointing toward higher current wages Washington information presented in Figure 8, with a 2.1% increase per in Oregon that currently pay less than $15 per hour are in urban parts of Oregon, and a threshold for a higher Fig. 5 2014 Oregon Median Wage, averaged at County. Source: OOEA year applied to both the Cost of Living and the Targeted in the three counties with the highest cost of living and $20 minimum wage in those same areas. Range. The ballot measure proposals – $15.00 and $13.50 the highest targeted range for the minimum wage. Both – are shown in comparison to 2019 projections of the $16 However, the median wage itself shows an incomplete current proposals – $13.50 and $15.00 – would be within picture. The median wage is depressed in Oregon regional economy. the Targeted Range in those counties. However, the lower $13 because, on the heels of the recent recession, job growth In many of the conversations we had participants wanted to wage level of $13.50 would fall below the Self Sufficiency has concentrated in high-paid jobs – tech, medicine, and see the chart in Figure 9 compared with the number of low- Standard in all three of these counties in 2019. $9 knowledge economy jobs – and in low-paid jobs. Jobs in the middle – paying $35,000-$55,000 per year – have not Linn Polk returned after the recession at the same levels as low-paid Lake Lane Coos Curry Grant Baker Union Crook Wasco Gilliam Marion Benton Harney Yamhill

Lincoln Figure 9: Comparing Economic Indicators to the Ballot Measure Proposals for $13.50 and $15.00 statewide wage floors. 2019 projections at 2.1% annually. Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River Multnomah Washington jobs. Fig. 6. 2014 Oregon Median Wage, Full Time Workers. Source: U.S. BLS $20 Figure 7 includes the mean (average) wage. It shows areas $20 where growth at the high end of the income scale may be

$16 driving up cost of living, particularly for housing.

$13 Figure 8 shows the range of scenarios that many $16 $15.00 economists would agree are an acceptable range for

$9 the minimum wage as one grey band. The bottom of the range is at 50% of the median, which is the average for $13 economies around the world. The top is set to 65%. The Linn Polk Lake Lane Coos Curry Grant Baker Union Crook Wasco Gilliam

Marion $13.50 Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River minimum wage is generally seen somewhere in this range. Multnomah Washington Fig. 7 2014 Oregon Mean Wages, by County. Source: OED We have added the Self Sufficiency line from Figure 3 to $20 show how one indicator of cost of living compares with the $9 range. $16 Figure 8 offers a helpful view of how different economic $13 experiences look throughout Oregon. We see that both Linn cost of living and the median wage are lower in many Polk Lake Lane Coos Curry Grant Baker Union Crook Wasco

$9 Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa of Oregon’s rural communities than in counties with a Malheur Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River Multnomah

large city. We see that in some counties a higher cost of Washington Linn Polk Lake Lane Coos living is related to a higher median wage – Benton County Curry Grant Baker Union Crook Wasco Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River Multnomah Washington and Deschutes County fit this model. However,Figure 8 also demonstrates that the current cost of living in some Figure 10: Economic Indicators Expressed as Share of All Low-Paid Jobs Statewide, With Current Policy Proposals. (For ilustration purposes only. Counties in grey not to scale.) counties is far higher than the share of the median wage. Figure 8: Cost of Living (Self Sufficiency Standard) Compared to Targeted Range $20 $20

$16 $16 Cost of Living 44% $13 $13 24% $9 $9

EconomicTargeted Range Indicators 28 Counties Lane, Linn, Marion, Polk & Yamhill Clackamas, Multnomah & Washington Linn Polk Lake Lane Coos Curry Grant Baker Union Crook Wasco Gilliam Marion Benton Harney Yamhill Lincoln Clatsop Morrow Douglas Wheeler Umatilla Klamath Wallowa Malheur Jackson Sherman Columbia Tillamook Je ff erson Josephine Deschutes Clackamas Hood River Multnomah Washington

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | INTRODUCTION [ 12 ] INTRODUCTION [ 13 ] pay is fine. And at this wage, they get the benefits from the WHAT WE HEARD state – and they don’t want to lose that.” For some employers, the minimum wage policy did Jesse Beason and Caitlin Baggott participated in not seem like the right first step. A Deschutes County conversations all over Oregon with the explicit intention of participant said he thought minimum wage was not the sharing what was discussed. However, these conversations real crisis. “The number one crisis here is no housing at any were confidential. Throughout this section of the report, price. The number two crisis is there are no jobs.” quotes from conversations will be offered in the speakers’ own words. Appendix D includes a full list of participants Many participants worried about the impact of increasing names and affiliations, along with the names and affiliations the minimum wage on jobs – particularly for young people. of a wide variety of advisors, interviewees, and sources. Several participants wondered at the plight of young The confidentiality of these conversations allowed greater workers with no job experience. “I just couldn’t pay $15 for candor than we could have achieved “on the record.” We that. I wouldn’t.” are grateful to each person who gave an hour, half a day, or more to share their views and experiences with us. Others observed that jobs that used to be starter jobs for high school students are now the full time job for people supporting families. “I go into a fast food restaurant and it’s “In my heart, I know I couldn’t live on the a 40 or 50 year old serving me. It’s really changed.” minimum wage.” One man shared a moving story about his mother entering Nobody we talked with disagreed with the basic problem the workforce late in life as a minimum wage employee – that poverty in Oregon has become a crisis that needs to after having raised her children – because that was the be fixed. As employers, many of our participants hear about “rung on the ladder” that was available to her. He spoke of and see poverty directly. “We want to do more. We hear pride in her determination, but heartbreak at her struggle what’s happening with our employees. We have employees to make ends meet. who live in their cars,” lamented a restaurant owner. Many participants also felt anxious about an increase in the Seeing their own employees struggle to make ends meet minimum wage pushing up the cost of living. “Does any of does not mean that employers are cold-hearted. Several of the data show what increased cost of goods and services the participants we met felt a would do to increase the deep sense of responsibility cost of living going forward? – but also felt that their hands What is the cost of living in a were tied. An employer community where the minimum with dozens of minimum wage goes up 20%?” One wage employees was clearly “We want to do more. We hear participant worried that even distressed when she said, “I what’s happening with our if the minimum wage were don’t know what to do. In my increased, “[It] probably isn’t heart, I know I couldn’t live on employees. We have employees even fast enough to keep up the minimum wage.” who live in their cars.” with the cost of living.” One Lane County non-profit The information that we shared director characterized the about cost of living was not problem vividly: “Poverty is surprising to participants, completely metastasized in although many of them found Oregon.” the regional differences interesting. Seeing the high costs of living in Multnomah, Many participants in our conversations shared the view Clackamas and Washington County, one restaurant owner that poverty has affected our communities so broadly and wondered: “You look at the state of things and – what deeply that it’s difficult to even begin thinking through how would happen if you don’t increase the minimum wage? to rout it. For many participants, increasing the minimum With these kinds of issues it’s not like people are going to wage seemed too small a step, too removed from the real stop demanding a higher minimum wage. Especially since problems, or likely to create a new set of problems. people are getting [$15 an hour] in other places. It’s not like One participant said, “Minimum wage is a total red herring. it’s going to go away.” The minimum wage isn’t meant to be a family wage. It’s entry level. It’s a low-skill wage.” “It is urgent that the legislature Another believed that workforce development and life skills training would be needed to turn things around in their get out in front of this.” While many participants were not strongly in favor of community. “Nobody will hire any of this workforce at any increasing the minimum wage in general, most viewed a wage. No skill set, no jobs experience, no transportation. solution devised by the legislature as a better alternative They’re obese, addicted, and unmotivated.” to the solutions being proposed by the current ballot A farmer also expressed her belief that workers aren’t measures. motivated to earn more. “The fact is these people don’t Many participants saw the pending ballot measure want to earn more money. They’d pursue a degree or add proposals as nearly certain to win. “All my employees are skills if they wanted to earn more. This is easy work and the voting for it. I try to explain what it will mean for us, but

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | WHAT WE HEARD [ 14 ] WHAT WE HEARD [ 15 ] they’re thinking with their own needs in mind.” All the same, employers feel strongly that they – or their amenities-based economy,” and that some of the challenge neighbors – will have no choice but to cut jobs if the “I don’t care if you pay $100 an hour. in those communities has been to adapt to that change. Participants viewed the legislature as the right group to minimum wage goes up. Or, they would replace higher- address the complexities they saw for their businesses in There are no jobs.” Part of that change, and the focus on amenities and paid employees with minimum-wage employees: “I’d hire In many of the rural communities we visited, the most an increase. “[Minimum wage] is more than the number. It’s services, has been a shift toward increased focus on new people to take the place of higher-level earners.” acute sense of urgency emerged around a twin – and how long is it phased in, what businesses does it impact, confounding – problem: There are not enough good jobs tourism. “The people who play here aren’t the people who what do you do with contracts, what about non-profits? It’s One participant in our conversations observed, “That and the workforce is not the right match for jobs that are live here,” one person quipped. As result, the economy urban versus rural. It’s tipped wages. The ballot measure – data is macro-economic data. It means that over time the open. Indeed, rural unemployment in Oregon (as in other faces ups and downs not just in seasonal labor but in does the ballot measure even talk about those things?” unemployment level will remain the same. That doesn’t states) has remained higher than urban unemployment weekday to weekend labor. mean that no one will lose their jobs.” Although the purpose of the listening sessions was not following the Great Recession. In some counties, official The head of a major regional tourist destination looked at to develop a shared policy position among participants, This is an accurate observation. Economic analysis at this unemployment numbers hover around 8.5%, but rural the problem in this way: “The average hours worked across it was notable to both Jesse and Caitlin, and also to our level looks at the economy as a whole – not at specific advocates are quick to point out that the official numbers all of our employees, per year: 585 hours, because we are local hosts, that participants were largely aligned around businesses or specific employees. don’t count people who have stopped looking for work. a seasonal business and even the strong belief that the legislature should act in February within those seasons there Another participant wondered if the available data was “Our problem in rural is about 2016. is a huge swing in demand primarily on urban areas, where a worker could more easily employment, not wage. We from weekends to holidays The rural employers and community leaders we heard from move from one job to another. “All of those employment need to create jobs,” one to mid-week. And that’s the preferred a regional approach or an opportunity for local effect studies have been done in urban areas. That New participant argued. Another equivalent of a 25% part-time control instead of a policy that would set the minimum Jersey study is an urban area. They’re based in much offered this view: “I don’t care “[A Portland business] competes worker if you take that across wage as a single high number across the state. As one bigger economies than what we’re talking about here.” if you have to pay $100 an against other businesses in the year. And we’re not unique participant succinctly observed, “There are already two or hour. There are no jobs.” Several employers also offered the opposite view – that in that respect. It’s a tourism- three regional economies. This isn’t a real change.” Portland. We have to compete increasing the minimum wage would result in job stability. One participant offered the based economy now. A great Participants in these conversations also felt strongly and As they saw it, increasing the wage would benefit them analysis that “One job in against the world.” percentage of the workforce with a near consensus that policy as complex as the because it would decrease turnover. “We have health, rural Oregon is 200 jobs in is subject either to seasonality minimum wage should be legislated by elected leaders, dental, sick leave, and benefits. Our goal is to have Portland.” She was referring or to the demand spikes and not at the ballot. “It is urgent that the legislature get out in lower turnover than our competitors. It keeps us cost- to the economic impact in the depressions that happen front of this,” a community leader claimed. “Even a small competitive.” community of the job. within those seasons.” improvement would be an improvement.” The most significant feeling from employers in rural areas was that they need resources, investment and new ideas “You can’t really expect business to bid for growing local economies – and that economic growth “It would take me about a year “This is going to be a job killer.” and prosperity for rural Oregonians will come from those Labor economists have dedicated more pages to the against itself can you?” to figure this out.” We explicitly did not talk with participants about what investments, rather than from what they variously described Despite grim predictions from some employers that they question of whether increasing the minimum wage will the right wage number should be for Oregon. We didn’t as a “Band-Aid,” “quick fix,” “one-size-fits-all,” or “wrong end might need to cut jobs, many employers we met were create unemployment than almost any other topic. discuss any kind of floor or ceiling, or a specific number of of the stick” minimum wage solution. committed to keeping their staff size and benefits the same And it’s no wonder: The majority of participants we met years for a phase-in. While the economic data we shared with an increased wage. But they were puzzled by how to “What we really need is a way to bring capital and services with said that their response to an increased wage would offered some general guidance, we were also careful to accomplish that goal. “I’d have to refigure everything,” one to rural areas,” said one Lane County employer. “We need to be to cut positions or hours. As one participant from Astoria say that none of the economic data that is available for mid-sized employer shared. “It would take me about a year invest in infrastructure to support businesses in rural areas,” put it: “Everyone would like to see a higher wage but at the analyzing these questions is accurate or comprehensive to figure this out.” said a Jackson County employer. end of the day they’d rather have a job.” enough to be the solitary basis for setting the minimum “If you’re a big enough company to have an HR wage. Another approached this problem in a different way: “We “75% of my employees right now make less than $15 an department, managing compliance is about 20% of do need to increase the minimum wage but rural leaders hour. Either [increasing the minimum wage on] a schedule That said, wage numbers did come up. what they do. Any new compliance is a struggle,” one can’t do it on their own.” He argued that an increase in rural or an index are both bad, because they don’t relate to my HR director for a company of 200 employees observed. Because many participants started from the position that wages needed to happen, but they needed to be matched ability to raise prices. We’re already going to take a haircut “Compliance should begin some number of months after the proposal on the table was $15 statewide, a lot of the by investments in rural towns – in the form of tax breaks, on our margin. Our shareholders are going to look to me the rules are written.” wage-focused conversation revolved around that number. subsidized loans, or other incentives to rural communities to to maintain those margins. So what am I going to do it if I help drive growth. A small restaurant owner echoed that observation. “We don’t have the pricing power to keep up with those costs? One rural community leader asked, “You can’t really expect aren’t payroll companies. We’re focused on lots of other I’m going to have to cut my expenses somewhere else. In addition to differences in what poverty, employment business to bid against itself can you? You say $15, and things. A new rule means additional work just to figure it What’s my number one expense? Wages. I’m going to cut and economic development look like in rural areas, rural then we say, ‘What about $11?’ Is that how you think this out.” As did a large employer in Deschutes County, “I’ve jobs. I’m going to figure out how to run the place with less businesses face unique challenges. “[A Portland business] will get solved?” had to add two full time people to our HR department just people.” competes against other business in Portland. We have to to keep track of ObamaCare. And now we have paid sick Others viewed it diffetently. “If you’re not at the table, compete against the world,” observed a rural employer However, the current prevailing view in economic research days.” you’re on the menu,” one large business leaders said. whose business relies on online sales. is that increasing the minimum wage does not result in “We don’t have a place at the table at all with the ballot For several employers who see their benefits as a core part unemployment. As Josh Lehner at the Oregon Office of One large employer with more than 1200 employees measure. Where’s our voice there? It would be better to of their offer to employees, the increased wage scenario Economic Analysis wrote in March 2014: saw his service economy business in a different way. “We find a way to be part of the negotiations now.” posed a challenge. Could they still offer the same benefits? aren’t competing on price because price-sensitive clients “The academic and research literature here is actually pretty “You have to look at the whole compensation package. It’s For many involved in the conversations, having clear aren’t looking in Oregon. They’re looking offshore or in clear. The consensus for the impact on employment from not just the paycheck.” economic data helped move the conversation away from Arkansas.” In his view, his company was already competing in raising the minimum wage ranges from small job losses to sticker shock, and towards acceptable options and ranges. an international market, and had developed a business model A few of them said the most important factor in maintaining no statistically significant impact. For those who do keep their that made price less important than the quality of their service jobs and benefits was simply having the time to work out job following the increase, they obviously receive an income – which depends on the loyalty and experience of staff. their business plan around it. Some wondered if companies boost. This is the thrust behind the recent Congressional that offer generous benefits might get an extra period Budget Office report on the minimum wage: relatively small One rural community leader observed that rural economies of time at the beginning of the wage increase process job losses but also more individuals raised out of poverty.” are “moving from a resource-based economy to an

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | WHAT WE HEARD [ 16 ] WHAT WE HEARD [ 17 ] to calculate changes and Washington and Clackamas culinary school. Meanwhile front of the house is making unique realities: offering summer jobs for local teenagers, develop a plan. “Managing the Counties. While the housing $22-$30 an hour. The question for me is how to even start a low expectation of year-over-year loyalty, prevalence of value of benefits into the total crisis felt relatable and urgent to redistribute that with our current laws. There’s huge migrant laborers on contract, an unusual annual cash flow formula is complicated.” in all parts of the state, we inequality from the front of the house to the back and we cycle, the option to mechanize an increasing number of “If you have to make a quick heard real surprise and need laws that allow us to manage that differently.” farm activities, and a lack of price control. One large business manager sympathy when participants made the case that this is the choice, you cut [staff]. But if you Many restaurant owners advanced this idea. A Bend Most farms in Oregon aren’t paying minimum wage for looked at the data from the reason that large business restaurant manager observed that “The most in-demand entry-level jobs because the labor market is so tight. On have time to plan you figure National Low Income Housing owners need to “get off job – the market dealt with the situation. The only way you average, farms and growers are paying $12-$13 per hour Coalition. the sidelines” and be more out how to make it work.” can hire a line cook now is at $13 an hour.” for skilled labor of any kind. “It’s really hard to find people,” involved in policy-making. A community leader and admitted one grower. “Finding good staff is hard in Portland. Everyone thinks “If bigger businesses don’t major employer in Pendleton they’re a chef now,” said another Portland owner. Another noted that “The market is already fixing this get engaged, we’re left with said, “We complain a lot that problem. We’re paying more because we can’t find labor at smaller businesses trying to Portland doesn’t listen to rural. One owner worried that any effort that was made to include the minimum.” work out the policy details. They’re just less sophisticated Maybe it’s time that we listen to Portland. They need an tip credits, or an exemption for tipped-wage employers and less experienced with politics. It’s different changing a increased wage. Maybe what we need to support is a way would leave restaurants paying less than other jobs in the OGC’s confidential survey found that the wage range on pay scale with a few hundred employees than with five.” for the wage to increase there.” This sentiment was shared area and would hurt the restaurant industry. His view was organic farms was between $9.50-$20 per hour. Several in most of the listening sessions in a variety of ways. that the quality of Oregon’s professional food service is indicated this includes farm owners and several reported Another community leader observed that many reports a key element to the success of the restaurant industry. they get paid less than their workers, with an average wage show temporary job losses after a minimum wage increase, “There’s no professional service industry in the mid-west. for all workers of $12.00. and recovery of those jobs after an adjustment in the Key Low-Paid Industries It’s the job of last resort. We don’t want that here.” market. She wondered if that process could be “smoothed A handful of industries offer the majority of low paid jobs in While many of the farmers we met agreed that they already out” by giving employers a longer planning period at the Oregon. We engaged employers in three of the major low- A few concrete ideas came out of these meetings: pay a higher wage for skilled labor, the idea of paying beginning of the increase. “If you have to make a quick significantly more for seasonal and low-skilled jobs was paid industries in conversations specific to their work. Some • Allow rural areas where Oregon’s farms and choice, you cut,” she said. “But if you have time to plan you of these conversations took place during the statewide universally troubling. figure out how to make it work.” vineyards operate to move forward on a slower and listening sessions, and some took place in Portland and predictable schedule. “The wage should go up for full time workers, but included employers from other parts of the state. Each • Allow employers with tipped employees to opt in paying more for a summer job is hard,” said one farmer, of the following reports includes a short set of prioritized considering teenaged seasonal berry pickers. Another “Maybe Walmart should pay more.” ideas that the groups developed during the course of their to a slower schedule, as the Seattle Minimum Wage Throughout Oregon business owners and employers viewed young summer employees as a kind of public conversation. policy did (see Appendix D). expressed the feeling that their investment and service. “A lot of 16 year old kids on the farm aren’t doing • Allow a period between the writing of rules and the commitment to their communities is not appreciated. “This much. You do it because you want to help them – but they implementation of the policy to give employers a is the worst business climate in 30 years. It’s worse than don’t add much value. You can kind of stomach it at $9.25.” “This whole industry is built on the minimum period for reconfiguring their business models. Measure 66 and 67,” warned another business leader. But the challenge with creating a separate wage for • Include a budget in the bill for informing employers wage.” | Restaurants seasonal employees is that not all seasonal employees Several farmers, entrepreneurs and small business owners about changes to policy – particularly if the policy The leisure and hospitality sector makes up 11% of all jobs are teenagers earning extra spending cash. Another farm pointed out that they don’t even earn minimum wage change is more complex than a single statewide in Oregon, with more than 200,000 jobs in 2014. Of those employer expressed concern about creating a “summer themselves. “Maybe a Walmart or a Safeway can pay more. number. positions, 68% paid less than $13.00. Nearly half (98,000) job” wage. “You need to set it up in a way that doesn’t take Maybe they should. But I don’t know how I could do it in my of these jobs are in the greater Portland area alone business,” said one rural small employer. The restaurant owners we convened also discussed the unfair advantage of migrant labor.” (Multnomah, Washington and Clackamas Counties). 1 in 5 concept of a “Super Wage” in some detail. A Super Wage jobs in this sector pays minimum wage. is an alternative approach to a tip credit. Instead of setting Others expressed deep concern about how migrant labor and contract labor would change under a chance “The real problem is . . . “ Some participants in each of the rural listening sessions tipped wages lower than the minimum wage and counting tips toward the required minimum wage, a Super Wage in the wage. Would an increased wage lead to more One consistent thread through all of our conversations were restaurant and café owners, North Star also illegal employment practices, such as wage theft? Several was a deep sense of what was at stake for Oregon. That convened a separate meeting dedicated to the interests sets the tipped wage far higher than the minimum wage, and withholds tips earned between the minimum wage community leaders and employers in agriculture as well concern took many shapes – anxiety about the loss of family and experiences of restaurant owners. Participants were as other sectors stressed the need for better information, farms, the loss of middle wage jobs, the erosion of rural primarily from the greater Portland area, but the gathering and the Super Wage. While some restaurant owners found this idea intriguing, most agreed that it wasn’t the accountabililty and enforcement around minimum wage communities, changes to or loss of opportunity for workers, did include rural restaurant owners as well. laws. “The budget for enforcement needs to be baked into or their children. Many participants’ comments began with most important thing they would want to advocate for in The restaurant owners outlined a significant labor issue the policy to begin with,” one argued. He observed that, “the real problem is . . .” addressing their policy needs. in their industry that is taking its own course regardless “there’s no money for it in the ballot measure.” The rising cost of housing, depths of mental illness and of the effort to increase the minimum wage. Whether or OGC’s survey and several conversations found that labor addiction, and the need for workforce development rose to not to continue to offer tipped service – regardless of the “Please don’t exempt us.” | Agriculture for produce growers is a significant share of their expense the top of many lists of concerns. minimum wage – occupied much of the conversation. This In addition to several meetings with individual produce (e.g. 62-80%). concern mirrored national movements to do away with growers around Oregon, North Star Civic Foundation One rural community leader asked, “The conversation we tipped wages, and major restaruant owners in New York, collaborated with the Organically Grown Company (OGC), In order to pay workers a higher wage in line with current need to have is much bigger than [minimum wage]. When Chicago, San Francsicso and Seattle announcing an end to the largest distributor of organically grown produce in the proposals, many indicated that they would have to be will we start having that conversation?” tips in their own establishments. Northwest, to gather input from farmers in the region, and able to pass it on in the cost of goods from an increase of met with several wine industry employers. between 0-30%, with an average of 28%. However, several The view of particpants in these conversation was that noted that a price increase of that magnitude was not up “We often complain that Portland tipping has skewed the perception of both employees and For many farmers in Oregon the possibility of an increased to them – prices for produce are set by the market, not the managers about the value of an employee’s labor. minimum wage comes at the same time as other major grower. doesn’t listen to rural.” concerns – the impact of global warming on their crops and While most of the participants throughout the state “The kitchen has the most skilled labor and is the lowest the challenges with shipping produce after the early 2015 A farmer noted: “Prices are determined by the international expected that costs of living in their communities were paid,” asserted one restaurant owner. “They got a specific port closures and slowdowns in Oregon and along the west market – for grass seed, grains, nuts, straw, tree fruit, lower than in Portland, almost all were surprised to see how education for their career and they start at $10 an hour coast. Growers and farmers noted that they face several vegetables, wine.” high costs of living had actually become in Multnomah, for a line cook when they have $40,000 in debt from

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | WHAT WE HEARD [ 18 ] WHAT WE HEARD [ 19 ] Others agreed. “Free trade agreements have led to Some advocated that in order to afford a higher downward price pressures on Oregon farmers who have to minimum, one complementary policy solution could compete with fruits and veggies produced in lower wage be restricting foreign crop imports, adding tariffs, or countries.” requiring other countries to raise their minimums via free trade bills. It was difficult for produce growers to see a way to fix the situation at the local level. “Unless other states and • Most felt that there would be a push/need for more countries also raise their minimum wages, Oregon farms efficient skilled agricultural labor (more H2A visas for that depend on high labor inputs may have a hard time skilled Mexican labor) and increased mechanization. completing with lower cost-of-production imports”. (For the crops that can’t be mechanized, there would be extreme price pressure and Oregon organic “You’d see a shift away from highly labor intensive crops,” growers might stop producing these) others predicted. Many pointed out that organic crops in NAO Position on Changes to the Oregon Minimum Wage particular are labor-intensive and that it might be harder to • Several noted that if agriculture was exempted from a new minimum wage increase policy, they worried make the math make sense if they didn’t see a significant Through this full process of discussions NAO has heard and wishes to relate the following points for the consideration increase in prices in the supermarket. that their labor force would choose other jobs (restaurants, gas stations, retail) rather than work Not surprisingly, many farm owners and managers reflected lower wage farm jobs. that an increased wage might tip the scales for them to • Several added that the Health Care Reform Act and 1.of Nonprofitslawmakers and want nonprofits living wages alike: for their program participants and staff: mechanize. Others worried about the real costs of that shift. workers compensation are significant expenses, “Almost every time we substitute technology for labor we advocating that single payer healthcare would also Nonprofit organizations are generally use more energy.” help with decreasing and spreading overall labor supportive of increases, both as employers and based on their concern for the members of their community who costs. A Willamette Valley grower noted that their family supports struggle with low incomes. Many nonprofits proudly pay their staff well above minimum wage and have set their a minimum wage increase – “even if it puts us out of business.” They offered a few ideas about how to minimize 2. Nonprofitsscales based are on costnot seekingof living aindexes general or exemption other key indicators. to an increase: the negative impact. The first was timing increases to take “A lot of the people who work here are a place during the seasons when they are typically sending paycheck away from being a client.” Nonprofits employ more than 172,000 more money out than they are bringing in – January or Oregonians representing 12% of the private workforce in the state. Given the important work nonprofits February. | Non-Profit Sector Many nonprofit employees in Oregon work for the implement across Oregon, they value their staff deeply and are not interested in becoming the employer of last “Timing is interesting. From November to December we’re minimum wage, or close to it. As the head of a Portland resort. With such a robust labor force and direct public benefit, nonprofit concerns should be taken into account in madly trying to figure out what we did this year and what area nonprofit focused on poverty and homelessness 3. Nonprofitsthe language want of the to legislation ensure minimal and rulemaking. disruption Nonprofits of critical are community not seeking services: a general exemption as a business class. will work next year. That’s when we make a lot of decisions. observed, “A lot of the people who work here are a January to April is the most difficult time to have a higher paycheck away from being a client.” wage hit. There’s not positive cash flow. If it hit at the good Charitable nonprofit work is end of the year, that would help.” North Star Civic Foundation partnered closely with the carried out for the public benefit. Nonprofits have complex business models that include third-party supporters Nonprofit Association of Oregon (NAO) to engage and of their work (foundations, private philanthropy, etc.), as well as public contracts at every level of government. “If it was passed in November [2016] and implemented in hear from nonprofit leaders all around Oregon. NAO is the January [2017] that would be a disaster,” another said. state association representing Oregon’s nonprofit sector, Nonprofits would need time to renegotiate contracts and grants. Contracts and grants received from federal, state Several farmers asserted that an “agricultural exemption” supporting the over 17,000 nonprofits. and local government would need funding-level adjustments to ensure minimal disruption to services for the most would be counter-productive for them. “We aren’t Throughout 2015, NAO conducted research and 4. Nonprofitsvulnerable members generally of support society. a regional approach to the minimum wage: competitive in the labor market as it is,” one farmer said. discussions on this topic. In the spring, NAO conducted a “Setting the wage lower doesn’t help anything if we’re survey and a series of discussion sessions across Oregon A regionalized approach set by the already paying above the minimum.” with more than 250 participating nonprofits. In October. legislature makes sense to nonprofits. By using Oregon’s existing economic districts and other broadly accepted NAO joined a series of discussions conducted by the Another put it more bluntly: “Please don’t exempt us.” data Oregon can develop a regional wage solution that is simple, rational, better for low-paid workers, and more North Star Civic Foundation and the Northwest Health different parts of the state; allows for the differing costs of living in urban and rural areas to be considered in wage At the same time, farmers pointed out some of the unique Foundation. responsive to the state’s rural economies. Such an approach takes into account the costs for providing services in facets of their industry: The idea that a higher wage might pay off over time in increased loyalty did not resonate. The Nonprofit Association developed their policy position setting; and still keeps jurisdictional authority with the Oregon legislature. Nonprofits have concerns regarding the “Many people work here as a first major job. We don’t (opposite) based on these conversations. expect people to stay for more than a season or two. A job For the broader nonprofit community, a few top level 5. Nonprofitscapacity for supportlocal jurisdictions a phased to or adequately scheduled study approach: and make rules on the complexities of the minimum wage. that’s only 8-10 months of the year is very different [from a concerns and considerations emerged: Nonprofits longterm job].” face unique challenges when the minimum wage is Nonprofits support an approach that takes into OGC asked farmers what policy or other provisions might increased due to their funding business models where account business type, region, public benefit status or other categorization to deal with specific complexities in help navigate an increase in the minimum wage, and heard some form of third party (not the recipient of services or implementation and to ensure success. Similar models are currently being used in cities across the nation for their the following: beneficiary of the activity) pays for the service or activity through contributions or contracts. Whether it is art, changes to the minimum wage. Nonprofits encourage the legislature to study those approaches and take them into • A coordinated campaign to raise locally grown prices civic engagement, mental health services, or historic 6. Nonprofitsconsideration prefer in policymaking. a change to the minimum wage implemented by the legislature: A change to the minimum to farms. preservation, all have in common some level of third-party • Many expressed concern about already needing to contributions for their work and services as their direct compete with cheaper imports from Canada and sources of funding. wage in Oregon is a complex issue, but one that nonprofits are willing and able to help solve. Working through Mexico. They said that currently competition from Many non-profit leaders bristled at the idea that they these complexities in a way that allows for successful implementation without disrupting important services is these areas holds produce prices down in Oregon. should “Get it from foundations.” viewed as essential. Nonprofits encourage our Oregon legislative policymakers to weigh the complexities with all voices heard and make sound policy decisions in the best interests of our state.

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | WHAT WE HEARD [ 20 ] WHAT WE HEARD [ 21 ] “First, they don’t have unlimited resources. Second, they don’t give that way. Third, think about the cycle. A grant POLICY OPTIONS takes more than a year to apply for, have it considered, and for the grant to arrive. What do we do in between?”

Some rural nonprofits saw an additional problem: their REGIONALISM higher transportation costs and a lower ability to unique challenges in cultivating a donor base in low- get skilled labor. So, they’d have to weigh those.” population areas. “The wealthy people with disposable income live in Portland. If the wage goes up there, We defined “regional” as the geographic area “If Portland is $15 and it’s $11 right outside, I’m going nonprofits have people they can go to for additional to live outside and drive in. You’ll see a lot more funding. Rural nonprofits have to figure out how to do more that a policy would apply to, rather than the driving.” with less.” governing body that would have authority “If we set something at the city limits here, it’s “It’s really about Portland versus everyone else. Increases over setting the wage. For instance, you going to have the de facto effect of affecting there would be fine and wouldn’t affect us,” one Pendleton everything around it. It already does. If you set the nonprofit leader stated. could imagine the state legislature having minimum wage for the city, everyone around the city is going to have to adapt, because this is where While nonprofit leaders were deeply concerned about how AUTHORITY to set the wage at the county level. the business is.” they would manage their budget through an increase, the majority we engaged did not see an exemption as a helpful • Setting wage boundaries at the county level made solution. “An exemption for non-profits is not a gift. We We found that participants in all parts of the state found better sense to participants – but only if counties participate in the labor market like everyone else.” a regional approach to be appealing and preferable to a were grouped into economic regions, as with high statewide wage increase. For many, it was clear that prevailing wage districts or local workforce areas. Because of the funding cycle for grant-funded the greater Portland area is on a different economic path • Participants felt that using an existing economic organizations, several nonprofit leaders liked the idea of than the rest of the state. region made more sense that creating new ones. a grace period of some kind for non-profits. A one year They did not feel prepared to choose among the waiting period for nonprofits appealed to some. Others “That two tier structure fits more with the data. MSA, Local Workforce Area, or Prevailing Wage felt that a one-year waiting period on its own would be Multnomah and Washington Counties could District options. insufficient. “We need a multi-year strategy so we can plan.” absorb that minimum wage. If Portland wants it – go ahead. Leave the rest of the state alone.” • A lot of heads nodded in one room when a Another added, “Delaying implementation only helps if How to achieve a regional approach was not as broadly participant offered: “MSA, labor workforce area, or there’s a strategy to align the implementation schedule with prevailing wage district seem from an economic a funding schedule.” agreed upon. Many rural business owners were confused that there was opposition to lifting the preemption law that perspective like the best way to do it. I don’t know For nonprofit groups and governments that rely on local, is currently in place. For them, lifting preemption seemed how to administer it politically, but that’s what seems state or federal contracts, the funding question raised like a straightforward way to address the issue. to make the most sense.” specific concerns. “Local governments and school districts • There was some concern about setting wages too Groups discussed the pros and cons of setting the wage in rural areas are already on the edge,” a rural community high in rural counties with strong city economies at at the city, county, and different regional levels (based leader observed. their centers. on prevailing wage districts, local workforce areas, or A social services nonprofit leader shared that, over the last metropolitan statistical areas). A few ideas rose to the top: “You can have weird spikes in rural counties like decade, “COLA [cost of living] increases did not keep up Hood River or Corvallis. But what you see in that with inflation. We didn’t cut services, but now we’re out too • There should be a limited number of wage areas – chart is the cities driving the rest of the county in.” far.” fewer than the number of counties, prevailing wage districts, or workforce areas. Fewer than four. Some • No group expressed strong concerns about the idea Another offered that, “If you support increasing the advocated for just two (Portland and everywhere that the wage might be set $2 or $3 higher in the minimum wage, you also need to ask the government to else). greater Portland area than in other parts of the state. increase money for social services contracts.” • Wage areas should be based on existing research “There’s three Oregons right now.” While a nonprofit leader whose work focuses on poverty about related economic zones, such as the Prevailing “We’re far enough from Portland that a gap in the argued that, “The best thing we can do to decrease our Wage District or Local Workforce Area. wages wouldn’t affect us. And there are counties caseload is to increase the minimum wage,” a colleague • Setting wage boundaries at the city level seemed close to Portland that would benefit because whose work is focused on mental illness and addiction generally unappealing in rural counties, where the businesses would relocate to those counties.” saw it differently. “Are we supposed to believe that mental central city (Bend, Eugene, Medford) has a starkly • Some business leaders saw an economic opportunity illness will go away if the minimum wage goes up? This will different economy than the surrounding county. if the wage were raised in Portland, but not as high in have no impact on the need – only our ability to provide Concerns included: Losing rural city centers to lower- rural areas. services.” cost rural areas; having the wage level set “too high” “The state law should index contracts to the minimum wage at the city level, and affecting costs of housing and “If it went up in Portland. The rest of the state would and address compression up the wage scale.” services in the surrounding rural county; creating start to see businesses spread out a little more.” sprawl; creating confusion. Groups in Astoria, Pendleton and Bend developed their “You could have some real unintended own sketches of how the regions should be divided (pages consequences if you have a different wage in a 24 and 26). city and just outside the city boundary. A sprawl mentality that ignores the benefits of being in a city center – aggregation of services, synergies.” “Light manufacturing might move outside the city and to lower wage regions. But then they’d have

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | POLICY OPTIONS [ 22 ] POLICY OPTIONS [ 23 ] AUTHORITY UNIFORMITY

We defined authority as (A) the ability to set We defined uniformity as how the wage Regional Concept Maps or change minimum wage policy – currently law was applied to different business types During the portion of each conversation focused on regions, participants in some groups rolled up their sleeves and held by the legislature; and (B) the ability (eg. nonprofit, manufacturing, agriculture, sketched out an approach to regional grouping that made sense to them with the data they had at hand. Here are two of those ideas. We have provided some economic and employment data to flesh out the impacts of these concepts. A third to reset or recalibrate the minimum wage small or large) or different business idea, the Bend Concept, appears on page 26. using economic data without changing policy practices (eg. offering generous benefits, Astoria Concept: Three regions based on local cost of more broadly – as BOLI currently does. hiring traditionally tipped employees).

Columbia Clatsop 1 - NW OR living. Counties are grouped based on existing prevailing 1 - NW OR wage districts. Umatilla Washington Hood River 12- Eastern Wallowa Multnomah 13 - Eastern Tillamook 2 - Portland-Metro 2 - Portland-Metro 9 - Central We found that, following the conversation about a regional 1 - NW OR Gilliam Morrow Sherman 12 - Central 12- Eastern We were surprised that in the majority of the conversations 9 - Central Union Yamhill 13 - Eastern Schedule A approach, participants were interested in how the entity 3- Mid Valley Clackamas Wasco 2- Clackamas 9 - Central we had, employers did not advocate for mitigation Marion with authority over the wage would be accountable and Polk 3- Mid Valley 3- Mid Valley • 45% of statewide 2015 jobs that are paid less than based on business type. For employers in rural areas, Wheeler 12 - Central Baker connected to communities going forward. In general, Jefferson 13 - Eastern Lincoln 10 - Central 4 - NW OR Linn $15. the possibility that a wage floor might be set in Benton 4 - Mid Valley 4 NW OR Grant 12 - Eastern participants felt comfortable that legislative leaders were response to the local cost of living and median wage Crook 10 - Central • 2014 Census: 1.7M residents accountable because they are locally elected positions. seemed to address their most pressing concerns. Lane Deschutes 5 - Lane 10 - Central • 2015 Rental Wage average: $18.15/hour for a 2 Statewide offices, such as the Governor’s office or BOLI, “If the local wage has a real connection to the local bedroom apartment. seemed too removed from the local area. economy, you don’t need other exemptions. If it’s a

Douglas Malheur 6 - SW OR 14- Eastern Some were interested in a new approach that included Coos Schedule B Harney 7 - SW OR farming community, it’ll be the right wage for those 14 - Eastern

Lake local voices: 11 - Central • 22% of statewide 2015 jobs that are paid less than businesses. If it’s a tourism economy, it’ll be the Klamath 11 - Central Curry Jackson right wage for those businesses.” 7 - SW OR 8 - Rogue Valley $15. “The legislature is the right group because they are Josephine 8 - Rogue Valley elected and accountable. But they need to hear • 2014 Census: 865k residents “I just don’t like the idea of saying to businesses: from an advisory council made up of local people.” We’ll give you a special pass, and you a special • 2015 Rental Wage average: $15.91/hour for a 2 pass.” bedroom apartment. “In the future the wage needs to be set by the State and the City or County.” Schedule C “Can you even get [employees] at a lower wage? “As a county administrator I think that the County Would they be just as reliable and wouldn’t keep • 33% of statewide 2015 jobs that are paid less than can do a better job of looking out for everyone, looking for a better wage somewhere else?” $15. and then you don’t have one city competing with We found that some business leaders felt that mitigation • 2014 Census: 1.4M residents another. It’s looking at the big picture.” to address specific business practices would help them • 2015 Rental Wage average: $13.73/hour for a 2 “Could people from Counties give input on to absorb the increased wage costs. The most consistent bedroom apartment. something that the legislature decides?” idea was that businesses that offer generous benefits should get “recognition,” or a “slower phase in” so that Participants agreed – although they did not necessarily like they could keep their benefits structure in place. Some it – that if an advisory group, committee, or task force was pointed out that the process of increasing wages is made created for the purpose of bringing local voices into wage more complicated by businesses that offer many benefits

Columbia policy on an ongoing basis, it would need to be balanced Clatsop 1 - NW OR – and that some kind of waiting period would help them to 1 - NW OR Pendleton Concept: Two regions based on local cost with both business and labor representatives. configure their new compensation structure. Umatilla 12- Eastern Wallowa Washington Multnomah Hood River 2 - Portland-Metro 9 - Central 13 - Eastern of living. Counties are grouped based on existing Tillamook 2 - Portland-Metro 1 - NW OR Gilliam Morrow Sherman 12 - Central 12- Eastern 9 - Central Union They also agreed that a level of transparency and We also heard in every conversation an interest in setting a Yamhill 13 - Eastern prevailing wage districts. 3- Mid Valley Clackamas Wasco 2- Clackamas 9 - Central connection to commonly accepted data would be helpful. different wage track or level for teenagers. Marion Polk 3- Mid Valley 3- Mid Valley Schedule A Wheeler (See section on Calibration.) 12 - Central Baker Jefferson 13 - Eastern Lincoln 10 - Central Linn Many other ideas arose about what industries or business 4 - NW OR Benton 4 - Mid Valley 4 NW OR Grant 12 - Eastern • 45% statewide of 2015 jobs that are paid less than “What if [authority] is at the state level, but not at sectors might benefit from either a different wage floor Crook 10 - Central $15. their discretion. If there’s some kind of econometric or a slower phase-in: Start-ups, manufacturing, exporting; Lane Deschutes 5 - Lane 10 - Central • 2014 Census: 1.7M residents data – COLA, median wage, what have you – and “businesses sizes” based on number of employees, size of that’s how it gets set, and it’s transparent, and • 2015 Rental Wage average: $18.15/hour for a 2 budget, ratio of labor costs to sales, and a variety of other neutral and unbiased.” Douglas Malheur concepts were all shared. In rural areas where full-time 6 - SW OR 14- Eastern Coos Harney bedroom apartment. 7 - SW OR 14 - Eastern work is less available, some wondered if a wage could be Lake 11 - Central Schedule B Klamath structured to incentivize full-time employment. 11 - Central Curry Jackson 7 - SW OR 8 - Rogue Valley Josephine 8 - Rogue Valley • 55% of statewide 2015 jobs that are paid less than $15. • 2014 Census: 2.3M residents • 2015 Rental Wage average: $14.41/hour for a 2 bedroom apartment.

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | POLICY OPTIONS [ 24 ] POLICY OPTIONS [ 25 ] EQUITY CALIBRATION MITIGATION

We defined equity as a minimum wage floor We defined calibration as the process to reset We defined mitigation as the policy tools Bend Concept: Three regional schedules based on local that is the same in every part of Oregon or update the minimum wage, as BOLI does economic factors, with additional, overlapping schedules available to the State to create different related to business practices. and for all business types and practices. now with annual CPI adjustments, or as a new wages based on region, business type, or process for evaluating or resetting any changes business practices. These tools are: Exemption

Columbia Clatsop 1 - NW OR 1 - NW OR After having conversations about the possibility of creating implemented based on region or business type. (no wage increase, eg. Farmers will not be Umatilla different wage schedules or floors based on region, Washington Hood River 12- Eastern Wallowa Multnomah 13 - Eastern Tillamook 2 - Portland-Metro 2 - Portland-Metro 9 - Central 1 - NW OR Gilliam Morrow Sherman 12 - Central 12- Eastern business type, or business practice, we asked participants 9 - Central Union required to pay a higher minimum wage), Yamhill 13 - Eastern 3- Mid Valley Clackamas Wasco 2- Clackamas 9 - Central if these changes should be permanent or temporary. We found that participants appreciate a few things about Marion Polk 3- Mid Valley 3- Mid Valley Wage Tiers (ongoing different tiers, eg. Rural Wheeler If temporary, we asked if they should be recalibrated the current CPI adjustment: 12 - Central Baker Jefferson 13 - Eastern Lincoln 10 - Central 4 - NW OR Linn Benton 4 - Mid Valley regularly based on economic data, or scheduled to return 4 NW OR Grant counties wages will be $1 behind urban 12 - Eastern • A predictable annual increase in wage helps them to a flat statewide number in a set number of years. Crook 10 - Central plan. counties), or Wage Schedules (different paths Lane Deschutes 5 - Lane 10 - Central One of the core concepts we engaged with here is that “Consistency is necessary to make long range toward a higher wage, eg. All businesses are businesses in some regions or industries have expressed plans. Otherwise it’s just putting your finger to the that they need time to adapt to an increased wage – not Douglas Malheur 6 - SW OR 14- Eastern wind.” increasing wages, but rural counties will be Coos Harney 7 - SW OR 14 - Eastern that they believe their region or industry should pay a lower Lake 11 - Central wage forever. • Knowing the index and method for increase feels one or two years behind urban counties). Klamath 11 - Central Curry Jackson 7 - SW OR 8 - Rogue Valley less politically charged, more transparent and Josephine 8 - Rogue Valley We shared Seattle’s current policy with groups – showing accessible – although they are not sure that the We found that exemption was the least desired form how the city has created four paths toward a wage of current tool is the right one. $18.13 in 2025. of mitigation, and that using phase-in to set different, “Automatic triggers take the thinking out of it for Schedule A Schedule B Schedule C responsive tracks for regions or businesses was the most We did not hear strong or strongly argued feedback on this the legislature.” appealing. Region Portland Metro Mid-Sized Rural issue. Many participants felt that the CPI based on the federal Of course, we met with business owners who were eager Business Practice Generous Generous Most participants thought that some level of ongoing Benefits Benefits measure was incomplete or inaccurate, and that the to find any policy that would “leave them out.” As one flexibility was a good idea, but were open to whether that 2015 freeze on wages was evidence that the tool was not large employer put it: Business Size Small Small flexibility should be achieved with regular resets or a fixed sufficient. They speculated that other tools could be used Wage Level - $$$ $$ $ schedule. We did not hear a positive statement that rural together with the CPI to improve the evaluation – such as “Any kind of exemption is better than no 2017 Oregon should always have a different wage floor than the county-level median wages or county-level cost of living exemption at all.” Wage Level - $$$$ $$$ $$ rest of the state. data such as rental data, or the Self Sufficiency Standard. 2018 One large business leader offered a concern about a Few participants thought that a set of different regional Wage Level - $$$$$ $$$$ $$$ schedule of increases beyond 2-3 years: 2019 wages should be created and then left as different “I’m not sure how I feel about prescribing wage tracks indefinitely. The idea of reviewing those changes, increases. How can that take into account changes separately from a CPI adjustment, was clear. in the economy in any way? It’s just an escalator. “With compounding interest you could see It’s a known escalator and it’s nice that it’s known. Portland far, far out ahead of the rest of the state in Seattle Concept: Four business-sector schedules offer But I’d rather see something indexed against several years. You don’t want to create Appalachia different paths toward $15 and a unified wage in 2025. something, because then you can look to that and here.” plan out a projection – like, here’s CPI and we’re going to respond to that. Rather than just ratcheting it up on a schedule.”

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | POLICY OPTIONS [ 26 ] POLICY OPTIONS [ 27 ] Priorities At the end of most of our conversations, we asked participants to share in writing or to the group two things: their most urgent concern, and the best idea they had heard in the meeting. Here they are in their words:

Biggest Concerns: Best thing you’ve heard: • Rapid inflation would result in no real gains for • A solution that isn’t a cookie cutter workers • A path toward something that’s a lot simpler and • Something overly complicated could become more responds to rural areas complicated • Relieved that varying options might respond to rural • Seeing minimum wage as a band-aid for all the realities poverty problems • Excited to hear creative ideas. The “A-B-C” schedule • Worried that minimum wage is seen as a proxy to divided into major metro, minor metro, and rural. solve problems of wealth inequality • Any kind of regional solution • $15 will mean lost jobs in rural areas • Tiers based on region, but don’t make it complicated • The process itself • Phasing it in • Minimum wage isn’t the answer to bigger problems • A regional approach and phasing it in • An immediate jump – a phase-in is better • Regional impact idea • Benefits cliff • Portland has one wage and the rest of the state has • If it increases too quickly another • How it will affect small private businesses • Salem needs to do something before it goes to the • Negative impact on low-income workers ballot • Concerned that the motivation to do something • Including total compensation in the formula doesn’t exist • Overall budget impact might be good for the state • No COLA increase in 7 years • Get something through the legislature • Blanket wage statewide • Tiers based on city population • Public benefits would get cut • Tiers based on city. Fewer categories is better. • Aspenization of Bend • Regionalism is helpful so the ‘State of Multnomah’ • Employees will be let go to meet the payroll isn’t dictating the rest of the state. • Collective bargaining • Importance of different wages for different groups: • Consumers will pay more AmeriCorps volunteers, youth, disabled. • Short term impact on schools? Higher class size nd • Multi-year review and planning reduced services for kids. • Factor in the benefits package in some way. • Migrant workers • The legislature needs to act • Impact on fixed income folks • Remove the preemption law so Portland doesn’t • Gov. contracts dictact the wage for the whole state • The market in this area will not support an increase of • Include benefits in full compensation estimate. this nature • Universal health care • Changing status of exempt and non-exempt workers • Fair trade agreements that lift other states and compounded with wage countries wages up • Will it affect collective bargaining contracts? • County sheriff vs. City police • $10 in Medford and $13 in Ashland means a business has to pay the Ashland wage. • Increases because of compression are the bigger problem that no one is talking about. • Businesses with small profit margin would fail • Local farms being able to complete with lower cost imports

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | POLICY OPTIONS [ 28 ] POLICY OPTIONS [ 29 ] APPENDIX A: MINIMUM WAGE MYTHS & REALITIES APPENDIX B. CURRENT MINIMUM WAGE JOBS IN OREGON, BY RATE AND INDUSTRY A significant level of misinformation persists about basic facts and available data related to the minimum wage. The data presented in this FAQ is not about an ideology or point of view – it’s simply the most commonly accepted current understanding. HOURLY WAGE BY INDUSTRY | OREGON EMPLOYMENT DEPT. 2014

Will raising the wage lead to unemployment? as it is in combination with other efforts. A good system of Minimum Min - $11.51 - $13.01 - $15.01 or Total Median public policy will include both a strong minimum wage, and Wage $11.50 $13.00 $15.00 more Wage No. smart tax credits for people who work every day to make a Total - All Industries 103,470 339,394 140,809 153,913 1,077,652 1,815,238 $17.74 This is one the two most studied topics in labor economics. living. Some confusion around this topic is based on older studies that did show increases in the minimum wage We should focus on poverty reduction, Leisure and Hospitality 41,326 76,039 19,319 15,790 48,527 201,001 $10.55 reducing employment. However, the current generation not raising wages. Retail Trade 20,693 73,558 22,351 23,042 76,565 216,209 $12.42 of research uses better methods – comparing neighboring Professional and Business Services communities, for instance. The current assessment is that Measures such as improving access to education or efforts 9,593 50,305 19,300 18,104 131,560 228,862 $17.54 increasing the minimum wage has little to no effect on jobs. that match qualified employees with well-paying jobs Educational and Health Services 6,866 42,546 20,237 23,458 171,532 264,639 $18.99 can help reduce poverty. However, putting more money State & Local Government 4,921 16,858 15,351 18,409 206,567 262,106 $25.04 in a weekly paycheck is the most effective way to enable Will raising the minimum wage lead to dramatic Manufacturing 2,668 18,781 12,091 15,297 137,618 186,455 $21.52 price increases and inflation? workers to earn enough money to support themselves and their families without assistance from the state. Increasing Natural Resources and Mining 7,638 16,324 4,688 4,607 18,345 51,602 $12.00 the minimum wage reduces both the number of people Not dramatically. Other Services 4,120 14,781 6,211 6,614 32,109 63,835 $15.06 in poverty, and the depth of the depth of poverty they Financial Activities 1,570 8,084 6,180 7,928 62,564 86,326 $21.30 A 2004 study of available economic research, “The Effect experience. Overall, the evidence suggests that these of Minimum Wage on Prices,” found that businesses tend poverty reduction effects are somewhat more significant for Wholesale Trade 1,434 7,516 4,941 6,228 54,602 74,721 $21.29 to raise prices modestly rather than decrease employment. African- American or Hispanic individuals, and for children Construction 870 5,523 5,143 7,374 70,087 88,997 $23.29 under age eighteen. Many industries find cost savings in employee retention Transportation, Warehousing, and Utilities 867 6,080 3,701 5,112 39,453 55,213 $20.00 and increased employee efficiency. Because of this, prices Jobs will move out of state. Information increase, but not commensurately with the increase in 859 2,849 1,253 1,910 27,801 34,672 $28.54 wage. That is – a 10% increase in the wage does not result Research does not bear this out. These are primarily jobs in a 10% increase in prices. In fact, increases are far lower that cannot be sent elsewhere. Most minimum wage than the increase in wage – about 0.4% per 10% increase in employers are service sector businesses that are tied to a LOW PAID JOBS AS SHARE OF ALL INDUSTRY JOBS & SHARE OF ALL EMPLOYMENT STATEWIDE state because that is where their customers are – businesses wages. The study did find that food is most likely to see the Minimum Share of TOTAL Less Share of TOTAL Share of highest increases – as much as 4%. That could mean that, like fast food, retail stores, and home health care services, Wage all jobs in than $11.50 all jobs in Less than all jobs in under the current proposal to increase wages to $13.50 by for example. When Washington’s minimum wage was Oregon Oregon $13.00 Oregon 2019, a $5.00 hamburger might cost $5.60 in 2019. nearly $3 higher than Idaho’s, businesses in Washington were flourishing, despite predictions to the contrary. Most minmum wage earners are teenagers or Total - All Industries 103,470 6% 442,864 24% 583,673 32% just starting a new job. Oregon already has the 2nd highest minimum wage. % jobs % jobs % jobs in Sector in Sector in Sector Not true. Some teenagers do earn the minimum wage, but True, but the state’s largest economic engine – the greater Leisure and Hospitality most minimum wage workers aren’t teenagers. Portland area – does not have the highest wage of a 41,326 21% 117,365 6% 58% 136,684 68% U.S. city. This area is quickly falling behind Seattle, San Retail Trade 20,693 10% 94,251 5% 44% 116,602 54% The average minimum wage worker is 35 years old. Francisco, and other cities on the west coast. Yet, the cost of Nearly two-thirds of minimum wage workers are women, Professional and Business Services 9,593 4% 59,898 3% 26% 79,198 35% the basics in Portland and Seattle is nearly identical. and many of them are supporting families. Nearly half of Educational and Health Services 6,866 3% 49,412 3% 19% 69,649 26% Oregon’s low-wage workers are married and 41% have State & Local Government 4,921 2% 21,779 1% 8% 37,130 14% children. Recent national evidence suggests that this is a 6% of Oregonians have earned minimum wage for change – and that, increasingly, low wage workers rely on the last 20 years. Increases don’t solve this problem. Manufacturing 2,668 1% 21,449 1% 12% 33,540 18% their earnings to support basic needs in their household. Natural Resources and Mining 7,638 15% 23,962 1% 46% 28,650 56% While it’s true that 6% of Oregon jobs are low-paid today, Other Services 4,120 6% 18,901 1% 30% 25,112 39% This kind of increase is unprecedented. We have as they were 20 years ago, the real question here is how the purchasing power of that wage has changed over the last Financial Activities 1,570 2% 9,654 1% 11% 15,834 18% no idea what we’re getting into. 20 years. The minimum wage reached its high-water mark Wholesale Trade 1,434 2% 8,950 0% 12% 13,891 19% Not true. The minimum wage was increased in Oregon by in 1968. The real value of the minimum wage has fallen 43% in 1991, with no decrease in employment. The wage over time. According to Dube, the minimum wage, “In 2014 Construction 870 1% 6,393 0% 7% 11,536 13% was raised again by a total of 37% over four years from dollars stood at $9.59 per hour in 1968 and $8.58 per hour Transportation, Warehousing, and Utilities 867 2% 6,947.00 0% 13% 10,648 19% 1996 to 2000. During that period, Oregon generated a 4% in 1979. During the 1980s, the it declined substantially, and Information 859 2% 3,708.00 0% 11% 4,961 14% annual growth in employment. over the intervening twenty years it has largely treaded water, reaching a historical low of $6.07 per hour in 2006 Means-tested programs such as the Earned Income prior to the last federal increase. It now stands at $7.25 per Tax Credit (EITC) are more effective instruments hour.” in fighting poverty. The minimum wage has not kept up with inflation. Workers No single anti-poverty measure is as effective on its own have far lower purchasing power today than they did in 1968.

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | APPENDICES [ 30 ] APPENDICES [ 31 ] APPENDIX C. STATE AND LOCAL MINIMUM WAGE SCHEDULES APPENDIX D: SEATTLE MINIMUM WAGE

Seattle Min Wage California Cities (4 of 11 local wage areas) SCHEDULE SCHEDULE SCHEDULE SCHEDULE WA A B C D CA SF Oakland LA San Diego IL Chicago OR CURRENT PROPOSALS*

** $15.56 $18.72 $17.24 $17.59 $16.90 $16.38 $15.39 $15 $13.50

2015 $9.47 $11.00 $11.00 $11.00 $10.00 $9.00 $12.25 $12.25 $9.00 $9.75 $8.25 $10.00 $9.25 $9.25 $9.25

2016 $9.71 $13.00 $12.50 $12.00 $10.50 $10.00 $13.00 $10.50 $10.50 $10.50 $9.25 $9.25 $9.25

2017 $9.95 $15.00 $13.50 $13.00 $11.00 $14.00 $12.00 $11.50 $11.00 $9.44 $11.50 $11.50

2018 $10.20 $15.36 $15.00 $14.00 $11.50 $15.00 $13.25 $12.00 $9.64 $13.25 $13.50

2019 $10.45 $15.73 $15.73 $15.00 $12.00 $15.38 $14.25 $13.00 $9.85 $15.00 $13.78

2020 $10.71 $16.11 $16.11 $15.75 $13.50 $15.76 $15.00 $13.33 $10.05 $15.32 $14.07

2021 $10.98 $16.49 $16.49 $16.49 $15.00 $16.15 $13.66 $10.26 $15.64 $14.37

2022 $11.26 $16.89 $16.89 $16.89 $15.75 $16.56 $14.00 $10.48 $15.96 $14.67

2023 $11.54 $17.29 $17.29 $17.29 $16.50 $16.97 $14.35 $10.70 $16.30 $14.98

2024 $11.83 $17.70 $17.70 $17.70 $17.25 $17.40 $14.71 $10.92 $16.64 $15.29

2025 $12.12 $18.13 $18.13 $18.13 $18.13 $17.83 $15.08 $11.15 $16.99 $15.61

**2014 Self Sufficiency for 2 adults, 2 children, by county. Washington is King County. Oregon is Multnomah County. All CPI increases calculated at 2.1%

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | APPENDICES [ 32 ] APPENDICES [ 33 ] APPENDIX E: PARTICIPANTS, INTERVIEWEES AND CONVERSATIONS The following list includes participants in formal listening sessions in Astoria, Bend, Medford and Pendleton, as well as a wide variety of small group and one-on-one interiews and conversations from March 2015 through December 2015. From the Office of Labor Standards, a new division within the Seattle Office for Civil Rights(206) 684-4500

Lizzie Adelsheim | Adelsheim Vineyard, Owner Brad Earl | Medford School District, Chief Operations Officer SEATTLE’S NEW MINIMUM WAGE ORDINANCE Josh Alpert | Chief of Staff to Portland Mayor Hales Karly Edwards | Working Families Party, Executive Director (SMC 14.19) Effective date: April 1, 2015 Ginger Anderson | East Oregonian Newspaper, HR Director Kurt Englund | Englund Marine & Industrial Supply, Owner Jason Bardford | Farmland LLP, Managing Partner Dan Field | Kaiser Permanente, Senior Director of Tony Bartelson | Bright Wood Corporation, Director of Community & Benefit External Affairs Operations;Straw Propeller Gourmet Foods, CFO INFORMATION FOR SMALL EMPLOYERS Steve Forrester | Daily Astorian, Publisher Chris Beck | U.S. Dept. of Agriculture, Rural Development (500 or fewer employees – also known as Schedule 2 Employers) Senior Projects Advisor Laura Fritz | Bend Community Center, Interim ED For Small Employers, the City of Seattle’s $15.00/hour wage will be phased in over the next 5-7 years. Terry Becktold | Farmers Insurance, Agent Gary George | Wildhorse Resort and Casino, CEO The Office of Labor Standards will implement the new ordinance, including outreach and enforcement. Nick Beliciks | State Employment Economist Jessica Gomez | Rogue Valley Microdevices, Founder & CEO Phil Bently | Oregon Health Care Association, Govt. Relations Jack Graves | Burgerviller, CCO MINIMUM COMPENSATION KEY TERMS Duncan Berry | Fish People, President Jack Gray | Wintergreen Farm, Owner All small employers are required to pay minimum compensation. Josh Billeter | Campfire Columbia, CFO Crystal Green | Craft3 CDFI, Assistant to President; Small employers can meet this requirement in two ways: EMPLOYEES Restaurant owner Nik Blosser | Celilo Media Group, President Seattle’s Minimum Wage (1) pay a flat, hourly minimum compensation rate, or Jorge Gutierrez | Lower Columbia Hispanic Council, Ordinance applies to employees Earl Blumenauer | Congressman (2) pay a reduced hourly minimum wage and make up the balance with working in Seattle, regardless Executive Director of the employee’s immigration Jon Blumenauer | The Joinery, CEO employee tips reported to the IRS and/or payments toward an employee’s John Haines | MercyCorps NW, Executive Director status. medical benefits plan. Susan Brooks | Director of Finance, City of Astoria Paula Hall | Community Action Program of East Central EMPLOYER SIZE Kathryn Brown | East Oregonian, Publisher Oregon, Community Services FLAT RATE To calculate employer size, Small employers pay a flat, hourly minimum compensation rate. count the employer’s total Curtis Burrill | Burrill Real Estate, Owner Scott Hamlin | Looptworks, Owner number of employees within Adam Campbell | Elk Cove Vineyards, Owner Susan Hammer | Dispute Resolution Services, Mediator Minimum Wage the United States, regardless 2015 (April 1st) $11.00/hour of where those employees Leslie Carlson | Brink Communications, Owner Laura Handy | Heart of Oregon Corps, Executive Director work. Employers do not need 2016 (January 1st) $12.00/hour to count employees who work Tim Casey | Bend Chamber of Commerce, President & CEO Ashley Henry | Beneficial State Foundation, Community 2017 (January 1st) $13.00/hour outside the U.S. Engagement Manager Karla Chambers | Stahlbush Farms, Owner 2018 (January 1st) $14.00/hour Jane Hill | Pendleton City Councilor WAGE 2019 (January 1st) $15.00/hour Martha Choe | Gates Foundation, CAO (former) A wage includes salary, hourly Steve Hill | Hill Law Office, Attorney Jamie Christman | Leadership Bend, Executive Director & pay, commissions, piece- Bend Chamber of Commerce, Director of Governmental John Horvick | DHM research, Vice President and Political rate, and non-discretionary TIPS AND/OR MEDICAL BENEFITS Affairs Director Small employers pay a reduced, hourly minimum wage and reach the minimum bonuses. Wages do not compensation rate through employee tips reported to the IRS and/or payments include tips or payments Jason Conger | Attorney, former legislator Kurt Huffman | Chef’s Table, Owner towards medical benefits, toward an employee’s medical benefits plan. If the tips and/or payments toward Scott Cooper | Neighbor Impact, Executive Director Elanor O’Brien Jeff Falen | Persephone Farm medical benefits do not add-up to the minimum compensation rate, the small though payment toward employer makes up the difference. medical benefits may impact Bob Darm | Yamhill County Mushroom Tom Kelly | Neil Kelly Company, Owner minimum wage requirements. Minimum Compensation Minimum Wage Maud Daudon | Seattle Chamber of Commerce, CEO Donna Kinnaman | Community Action Program of East Central Oregon, CEO 2015 (April 1st) $11.00/hour $10.00/hour MEDICAL BENEFITS Piper Davis | Grand Central Bakery, Culinary Director Anne Koubisch | Ford Family Foundation, President 2016 (January 1st) $12.00/hour $10.50/hour For medical benefits to Ryan Deckert | Oregon Business Association, President qualify toward the minimum 2017 (January 1st) $13.00/hour $11.00/hour Sue Kupillas | Jackson County Commissioner (former) wage, the plan must be the Gun Denhart | Founder Hanna Anderson (retired) 2018 (January 1st) $14.00/hour $11.50/hour equivalent of a “silver” level John Larkin | Roxy Anne Lanes, Proprietor st Tom Denison | Denison Farms, Owner 2019 (January 1 ) $15.00/hour $12.00/hour or higher as defined in the Dr. Rob Law | Family physician, Lower Columbia Clinic and 2020 (January 1st) $15.75/hour $13.50/hour federal Affordable Care Act. George Devendorf | Transition Projects, Executive Director Columbia Memorial Hospital

st 2021 (January 1 ) $16.49/hour $15.00/hour Mike Dickerson | Craft3 CDFI, Special Projects Manager Laura Leebrick | West Oregon Waste BIll Dickey | Morel Ink, Owner Anna Lefer Kuhn | Arca Foundation, Executive Director Rob Dietz | Farmland LLP, Special Projects Manager Josh Lehner | Oregon Office of Economic Analysis

A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | APPENDICES [ 34 ] APPENDICES [ 35 ] Sue Levin | Bolt Threads, CMO Joe Siri | Siri and Son Farm BIBLIOGRAPHY Nolan Lienhart | ZGF Architects, Director of Planning and Peter Skrbek | Deschutes Brewery, CFO Urban Design Bill Smith | William Smith Properties, President Allegretto, Sylvia, Arindrajit Dube, Michael Reich and Ben Zipperer. 2013. “Credible Research Designs for Minimum Wage Kristofor Lofgren | Bamboo Sushi, Owner Studies.” Working Paper, Institute for Research on Labor and Employment, UC Berkeley. Craig Smith | Rural Development Initiative, Executive Sarah Lynch | Rogue Valley Manor, Executive Director Director Autor, David H., Lawrence F. Katz, and Melissa S. Kearney. 2008. “Trends in U.S. Wage Inequality: Revising the Revisionists.” Review of Economics and Statistics 90 (2): 300–323. Marissa Madrigal | Multnomah County, CFO Willie Smith | Congressman Blumenauer, District Director/ Senior Advisor Belman, Dale and Paul Wolfson. “Does Employment Respond to the Minimum Wage? A meta-analysis of recent studies Sheila Martin | Institute of Portland Metropolitan Studies, from the New Minimum Wage Research.” School of Human Resources & Labor Relations Michigan State University and Population Research Center, Director and Professor Zeke Smith | United Way, Chief Impact Officer Tuck School of Business, Dartmouth College. Ben Mayer | Grain & Gristle, Ned Ludd, Old Salt restaurants, Alison Sokol Blosser | Sokol Blosser Winery, Co-President Boushey, Heather and Sarah Jane Glynn. 2012. “There are Significant Business Costs to Replacement Employees.” Center Owner Paul Sonn | National Employment Law Project, General for American Progress. Terry McDonald | St. Vincent DuPaul, Lane County, Counsel Card, David, and Alan B. 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A Collaborative Community Engagement Project of North Star Civic Foundation & Northwest Health Foundation | APPENDICES [ 36 ] APPENDICES [ 37 ] Neumark, David, and William Wascher. 2000. Minimum wages and employment: A case study of the fast-food industry in New Jersey and Pennsylvania: comment. American Economic Review. Neumark, David and William Wascher. 2006. “Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research.” National Bureau of Economic Research Working Paper 12663. Cambridge, MA. Organisation for Economic Co-operation and Development (OECD). 2013. ““Earnings: Minimum wages relative to median wages.” OECD Employment and Labour Market Statistics (database). doi: 10.1787/data-00313-en (Accessed on 27 May 2014). Reddy, Raahi and Daniel Morris, Ellen Scott, Bob Bussel, Shauna Dyers. 2014. “The High Cost of Low Wages in Oregon.” University of Oregon Labor and Education Research Center. Reich, Michael, Ken Jacobs, and Miranda Dietz. 2014. Making Mandates Work: Raising Labor Standards at the Local Level. Los Angeles: University of California Press. Reich, Michael, Peter Hall, and Ken Jacobs. 2003. “Living wage policies at San Francisco airport: Impacts on workers and businesses.” Institute of Industrial Relations Working Paper No. 098-03. Berkeley, Calif.: IIR. Reich, Michael and Ken Jacobs, Annette Bernhardt, Ian Perry. 2015. “The Proposed Minimum Wage Law for Los Angeles: Economic Impacts and Policy Options. A Report to the Los Angeles City Council.” Center on Wage and Employment Dynamics, UC Berkely. Reich, Michael and Amy Laitinen. 2003. “Raising Low Pay in a High Income Economy: The Economics of a San Francisco Minimum Wage.” University of California, Berkeley, Institute for Research on Labor and Employment, Report for the San Francisco Board of Supervisors. Ruetschlin, Catherine. 2012. “Retail’s Hidden Potential: How Raising Wages Would Benefit Workers, the Industry and the Overall Economy.” DEMOS. Schmitt, John. 2013. “Why Does the Minimum Wage Have No Discernible Effect on Employment?” Center for Economic and Policy Research. Summers, Lawrence H. and Ed Balls. 2015. “Report of the Commission on Inclusive Prosperity.” Convened by the Center for American Progress. Thompson, Lynn. March 12, 2014. “Studies Look at What Happened When Cities Raised the Minimum Wage.” Seattle Times. US Bureau of Labor Statistics. “Characteristics of Minimum Wage Workers, 2013.” REPORT 1048

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