How Oregon can make progress on lifting wages

For two years now, Oregon’s wage floor has been stuck in place. It’s run aground at a place well short of what families need to make ends meet.

That may seem strange to say given that Oregon’s minimum hourly wage went up 50 cents on July 1, but that increase only keeps pace with inflation. It’s just enough to not fall behind the rising cost of living, but not enough to make progress.

Progress on wages is essential to remedy the widespread economic insecurity afflicting Oregonians, and there are several strategies Oregon can pursue to boost the paychecks of workers.

A recent analysis by United Way reminds us how vast economic insecurity is in our state and nation. In 2022, the year with the most recently available data, 45% of households in Oregon made too little to reasonably afford the necessities of modern life: food, housing, transportation, and a few others.

That year, a single parent with a child in daycare in Multnomah County needed a wage of nearly $40 per hour to cover all essentials. But two years later, the Portland metro area’s minimum wage — the highest in the state — stands at $15.95

Over the past decade, the share of households struggling to make ends meet has been rising, a trend that “represents a major vulnerability in our economic system,” the United Way warns.

Making Oregonians more secure requires action on several fronts, not least of which is increasing the wages of workers. Fortunately, there are tried and true ways for Oregon to raise wages.

Removing barriers

One way is to remove the barriers to worker organizing. Historically, unions have been the main driver of better wages and working conditions for workers. But through decades of sustained assaults by corporate interests on organized labor, the share of workers belonging to unions withered.

While federal law mainly governs workplace organizing, Oregon can take steps to strengthen the hand of workers. For one, Oregon can use state law to protect workers not covered by federal law.

Such is the case with agricultural and domestic workers, left out of the protections in the National Labor Relations Act of 1935 due to opposition from Southern segregationist members of Congress, who succeeded in denying bargaining rights to a group of workers who were mainly Black. Today in Oregon, people of color continue performing a disproportionate share of agricultural and domestic work. By establishing a state-protected right to organize for agricultural and domestic workers, Oregon can increase the collective power of some of the lowest-paid workers in the state.

An even more direct way to raise the wages of groups of workers is for Oregon to establish worker standards boards, also known as wage boards or sectoral bargaining. A workforce standards board is a public body that establishes minimum wage and working standards for an entire industry. Created by the legislature, such a board is usually made up of workers, employers, public officials, or members of the public.

Rather than bargain for pay increases one establishment at a time, the standards board approach secures pay increases one industry at a time. Take the case of the Minnesota standards board for nursing home workers. Established just last year, the board recently set wage floors for the industry that will range from a low of $20.50 to a high of $28.50 per hour by 2027. Or consider the case of fast food workers in California, who saw a minimum wage of $20 per hour take effect in April.

Finally, in terms of state strategies for raising wages, we need to circle back to the minimum wage, the ultimate wage floor. In 2016, after several years of mobilization by workers and the public, the Oregon Legislature agreed to raise the minimum wage in real terms, beyond cost-of-living adjustments. The Legislature created a three-tier minimum wage — a standard wage, a wage for the Portland metro area, and a wage for non-urban counties — with phased-in increases over the next six years.

By 2022, the standard, middle-tier wage level in Oregon had increased 23% in real terms from the time the increases began. It was real progress, even if insufficient. And contrary to the claims of opponents, these minimum wage increases had no dampening effect on jobs. Indeed, some research has found that a stronger minimum wage may increase employment.

Making Oregonians more economically secure requires a minimum wage that isn’t stuck in place, but rather makes forward progress, lifting the wage floor. And it requires the state to pursue other strategies, like standards boards, that are true and tried ways of boosting the paychecks of Oregonians.

Juan Carlos Ordóñez is the communications director of the Oregon Center for Public Policy, as well as the host of the podcast Policy for the People. Outside of work, Juan Carlos likes to spend time tending to his garden.

oregon.capitalchronicle.com