Congress can learn from Oregon on minimum wage

Break the minimum-wage stalemate by acknowledging regional differences and negotiating a compromise that works in low-cost states

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Mark worked 20 years at The Oregonian in positions including business editor & editorial writer. He currently is a communications consultant.

As the political debate in Washington, D.C. moves on from a soon-to-be-passed stimulus bill to an increase in the minimum wage, which did not survive stimulus negotiations, Congress should look to Oregon for a path forward.

Oregon was one of the first states to approve legislation to put its minimum wage on a path toward $15 an hour – and legislators made some wise decisions that could inform the national debate. First, and most important, Oregon did not enact a uniform minimum for the entire state. The wage law passed in 2016 set three different wage categories for Oregon: a standard rate, a higher rate for the Portland-metro area, and a lower rate for non-urban counties.

This approach addresses one of the primary concerns of moderates in both parties – that a $15 minimum wage is too high for states with low cost of living, many of which currently use the federal minimum of $7.25. Another key feature of the Oregon legislation was the deliberate timetable used to phase it in.

The first Oregon increases, 25 cents or 50 cents an hour depending on location, went into effect July 1, 2016, about four months after Gov. Kate Brown signed the bill. The last tranche of predetermined increases will be July 1, 2022, with annual adjustments for cost of living after that. Most congressional proposals called for phased-in increases, but with faster timetables than the one used in Oregon. For states at the current minimum, a long runway to allow businesses and local economies to adjust is important.

Oregon is in a good position to influence the debate in Congress. Senators Ron Wyden and Jeff Merkley have been longtime proponents of increasing the minimum wage. And Rep. Kurt Schrader has drawn national attention as the only Democrat still in the House who voted against a $15 minimum wage in 2019. That attention intensified when he voted against the current stimulus bill, saying it’s too big and not targeted toward people who need help. Schrader does not oppose an increase in the current minimum of $7.25 but has advocated for an Oregon-style approach to national legislation with regional minimums instead a one-size-fits-all national approach.

Schrader’s instinct to apply the Oregon formula nationally is good. But for this formula to truly work nationally, it may need to be even more nuanced than current regional approaches, i.e. lumping several states together and applying a similar wage to them all. After all, if Oregon didn’t think one wage would be equitable to the entire state, it’s unlikely that one wage could be equitable throughout a region made up of several states.

Even a population-based approach like Oregon’s would have inequities. For example, Portland and San Antonio have similar metro-area populations, but the cost of living in San Antonio is much lower. Likewise, the cost of living in San Antonio is higher than the cost in Big Lake, Texas, or other rural parts of the state. Setting the federal minimum at a level that works for the lowest cost-of-living areas and letting states and cities adopt higher rates where needed makes more sense.

There’s another reason to pursue this approach and it reflects another lesson from Oregon. The 2016 Oregon minimum wage law was passed at a time when there still was a hint of bipartisanship in the Legislature. It was produced after negotiations that included both parties and representatives from all parts of the state.

A similar bipartisan approach almost certainly will be necessary to move a minimum wage increase through Congress. Since the Senate Parliamentarian ruled that a minimum wage increase cannot be part of reconciliation, a process reserved for budget- and tax-related bills, the Senate will need to secure 60 votes to overcome a filibuster. That means to increase the minimum wage, the Senate must either end the filibuster – a step opposed by at least two moderate Democrats – or craft a bill supported by all moderate Democrats and ten Republicans. That sounds impossible in today’s partisan climate, but there is a potential path.

There are states with a combined seven Republican senators that already have minimum wages of $10 or higher or have appproved increases that are being phased in. Two other completely red states (South Dakota and Nebraska) have minimums of $9 or more. Advocates should start minimum wage discussions with those senators and West Virginia’s Joe Manchin, who is the leading voice for moderate Democrats in the Senate and has suggested a national minimum of about $11.

Reaching a bipartisan compromise in the range of $10-$12 an hour has an advantage beyond increasing pay for workers in at least 29 states while minimizing price increases and job losses. It also would improve the tenor in Washington, showing that members of two increasingly polarized parties still can work together to reach solutions to problems – solutions that fall short of campaign promises on either side but perhaps work better than the promised approaches would have.

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