Who’s impacted by our minimum wage increase

Prosperity-projectBy The Oregon Prosperity Project

Which Oregonians are Impacted by Increases in the Minimum Wage?

Just last January, Oregon’s minimum wage rose to $9.10 an hour, and that might just be the beginning. So what’s that mean to you? After all, you don’t work for minimum wage.

Well, maybe it means a lot.

Despite the fact that Oregon now has the second highest minimum wage in the entire nation (just behind Washington State at $9.32) Oregon policymakers are talking about raising it even higher.

You might be surprised to find out how further increases will affect Oregon workers and businesses.

Let’s look at some facts.

First, a change in the minimum wage affects a small portion of the total workforce. Out of Oregon’s workforce of over 1.7 million people, about 5.5% of workers make minimum wage and of those, more than half are tipped employees – meaning that they often make far more than minimum wage.

Second, people often assume that many minimum wage workers are full-time employees. That’s wrong. In Oregon, only 1.4% of full-time hourly workers make minimum wage. And across the U.S., only 2% of full-time hourly workers make minimum wage, while 10% of part-time hourly workers make the minimum wage.

When it comes to being the breadwinner, the vast majority of minimum wage workers do not have families to support. In 80% of U.S. households with children, and in which someone earns minimum wage, that job accounts for less than 20% of total household income. That means that in most of those households, the minimum wage job is supplementing income earned from higher paying jobs.

So it shouldn’t be a surprise to learn that workers in minimum wage jobs are somewhat transitory; for example, almost half of all such workers are employed by the food service industry, where, according to the Bureau of Labor and Statistics, they stay at a job for a median of only 2.3 years. This is half as long as the overall median job tenure of 4.6 years. With such a short tenure, food service industry jobs can be the precursor to better, higher-paying jobs that could only be obtained after a worker has gained experience.

So what does this total up to? A higher minimum wage means that workers cost more and businesses may not be able to hire as many employees, particularly those who are inexperienced and new to the workforce – the very people that really need that first job.

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