Raising the minimum wage is a mixed bag

Published Feb 20, 2013 at 04:00AM

It’s easy to buy into the notion that the state of Oregon should be required to pay its employees enough to keep them off food stamps. It’s equally easy to believe that a higher minimum wage for private sector workers will lift folks out of poverty. In each case, however, the consequences of such actions surely are not what proponents want.

Thus, the Service Employees International Union Local 503, which represents many of Oregon’s lowest-paid state employees — gardeners, custodians and others — will negotiate to make $30,000 the minimum salary paid by the state, up from about $23,000 and well above the private sector minimum of $18,616 per year in Oregon. Meanwhile, the Obama administration seeks to increase the federal minimum to $9, up from the current $7.25 per hour.

Sounds pretty good until you look beyond the numbers a bit, where you’ll find ample research to support the notion that raising the minimum wage, either for state or private sector employees, is a decidedly mixed bag.

Consider, for example, all those struggling people who will presumably say goodbye to poverty if the federal minimum wage goes to $9. According to a study by researchers at San Diego State University and the University of Georgia and borne out by dozens of other studies, most workers making the minimum weren’t living in poverty in the first place. Almost 87 percent came from families with incomes two or three times above the federal poverty level. Meanwhile, the unemployment rate for teenagers stands at nearly 24 percent.

It’s also difficult to believe that raising state employees to $30,000 a year would do anything but put some of them out of work. Oregon is already having difficulty paying its bills; if it must pay nearly 2,000 of its workers as much as $5,000 more per year, surely some of those workers will either be laid off or never hired at all. Championing higher minimum wages and salaries has a feel-good ring to it that is hard to ignore, but reality is something different.