Oregon s Minimum Wage. Research All Staff Meeting October 7, 2015

Transcription

1 Oregon s Minimum Wage Research All Staff Meeting October 7,

2 The Current Minimum Wage Debate? Do not let any calamity-howling executive with an income of $1,000 a day, who has been turning his employees over to the Government relief rolls in order to preserve his company's undistributed reserves, tell you that a [minimum wage] is going to have a disastrous effect on all American industry.

3 The Current Minimum Wage Debate? Do not let any calamity-howling executive with an income of $1,000 a day, who has been turning his employees over to the Government relief rolls in order to preserve his company's undistributed reserves, tell you that a [minimum wage] is going to have a disastrous effect on all American industry. - Franklin D. Roosevelt, 1938

4 How Oregon s Minimum Wage Compares with Other Areas

5 What is the Minimum Wage? U.S. minimum wage is $7.25 per hour Oregon s minimum wage is currently $9.25 per hour Roughly 100,200 jobs paid minimum wage in early 2015 Second highest state minimum wage in the nation Adjusted annually based on inflation Will remain at $9.25 in 2016 Washington s minimum wage is $9.47 per hour Some cities have set higher minimum wages. A few examples: San Francisco is $12.25; Washington, D.C. is $10.50 Seattle s depends on business size $10.00 for small firms, $11.00 for large firms New York will have a higher minimum wage for fast food workers $15.00 per hour by 2018 (city) and 2021 (state)

6 Green States Have Higher Minimum Wages. Federal Minimum Wage Applies in Others. 6

7 Oregon s Minimum Wage Local areas cannot set their own minimum wage. There s no tip credit for Oregon employers. Federal wage for tip credited jobs has been $2.13 since Seven states do not allow tip credits, including California, Washington, and Nevada. No sub-minimum rates for trainees or minors. Some jobs are exempted from minimum wage. Some agricultural workers: Hand harvest and pruning workers paid on a piece rate Range production of livestock Piece rate workers under the age of 16 years Baby sitters and domestic workers on a casual basis Other jobs see BOLI website

8 $11.00 $10.00 Oregon and Federal Minimum Wage, Adjusted for Inflation Using Consumer Price Index Research Series (CPI-U-RS) OR Minimum Wage ($2016) U.S. Minimum Wage ($2016) $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $ Source: Oregon Employment Department, Bureau of Labor Statistics

9 Who Works Minimum Wage Jobs? 9

10 Who Works Minimum Wage Jobs (U.S.) Minimum wage workers are more likely to be women 63% of minimum wage workers are women Minimum wage workers tend to be young. The median age of minimum wage workers is about 25 years. There is little difference by race and ethnicity in the percentage of workers at or below the federal minimum wage. 10

11 Number of Minimum Wage Workers Median age of minimum wage workers is about 26 years for women and about 24 years for men. 600,000 Workers at or Below Minimum Wage by Age and Gender, United States, , , ,000 Women 200,000 Men 100, and 11 older Source: Bureau of Labor Statistics, Current Population Survey Age Group

12 Who Works Minimum Wage Jobs (U.S.) Most minimum wage workers do not have a college degree. 54% have no college experience Another 30% have some college, but no degree Minimum wage workers tend to be part-time (usually work fewer than 35 hours per week). 65% of minimum wage workers are part-time Half of all minimum wage workers are in food preparation and serving related occupations. 50% are in food preparation and serving 14% are in sales and related 7% are in transportation 6% are in personal care and service 12

13 Oregon s Minimum Wage Jobs

14 Source: Oregon Employment Department, First Quarter Wage Records The minimum wage is about 50% of the median wage. $20 Oregon's Minimum Wage and Median Wage (First Quarter of Each Year) Median Wage Minimum Wage $15 $10 $5 $

15 Leisure and hospitality, retail trade, and natural resources have the largest concentration of minimum wage jobs. Percent of Jobs by Hourly Wage Range Oregon, 1st Quarter 2015 Minimum Wage $ $13.49 $ $14.99 $15.00 or more 69% of all min. wage jobs (26% of all jobs) Leisure and Hospitality Retail Trade Natural Resources and Mining Other Services Private Educational Services Professional and Business Services Information Health Care & Social Assistance Local Government Wholesale Trade State Government Financial Activities Transportation, Warehousing, and Utilities Manufacturing Construction 15 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Oregon Employment Department, Unemployment Insurance Wage

16 There are 22,000 minimum wage jobs at Oregon s largest employers (500+ jobs), but that s a small share of all their jobs. Percent of Jobs by Hourly Wage Range Oregon, 1st Quarter 2015 Minimum Wage $ $13.49 $ $14.99 $15.00 or more Under 5 employees 43% of min. wage jobs (33% of all jobs) 5-9 employees employees employees employees employees employees 500 or more employees 16 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Oregon Employment Department, Unemployment Insurance Wage Records

17 Minimum wage jobs are usually 5% of all jobs.

18 Politics of the Minimum Wage

19 What s on the Minimum Wage Agenda? Oregon $15 Minimum Wage Initiative (2016) $11.50 in 2017 $13.25 in 2018 $15.00 in 2019 Continues to adjust for inflation in 2020 Proposal likely to be discussed next legislative session Raise minimum wage to $13.50 over two years Allow local areas to set higher minimum wages Also recently announced as an initiative, so it could also go to ballot in 2016.

20 Most minimum wage jobs are in metro areas, but minimum wage jobs are a large part of some rural economies. 20

21 What do Economists Think? 21

22 What Do Economists Say About the Minimum Wage? They say a bunch of stuff. 1990s rivalry between two groups of minimum wage researchers: Neumark and Wascher Min. wage hurts employment Card and Krueger Min. wage doesn t hurt employment Congressional Budget Office increase to $10.10 (2014) Employment: -500,000 workers Range from slight decrease to -1.0 million workers Workers with wage increases: 16.5 million Increase in annual real income: $2 billion Change in number of people in poverty: -900,000 (2% decrease)

23 What Do Economists Say About the Minimum Wage? What Does the Minimum Wage Do? (2014 literature review) Considered together, increases in the minimum wage raise the hourly wage and earnings of workers in the lower part of the wage distribution and have very modest or no effects on employment, hours, and other labor market outcomes. particularly for women.

24 Nick Beleiciks, State Employment Economist Oregon Employment Department (503) Join the conversation: OregonEmployment.blogspot.com