The recent article (“Oregon leading national debate on minimum wage”), claiming that Oregon is trailblazing with the highest minimum wage in the nation, overlooks the consequences of embarking on such a path.
Oregon has long had one of the highest state minimum wages in the country, and its least-skilled job seekers have suffered as a result. In 2015, for instance, the state’s youth unemployment rate of 22.2 percent was more than 5 percentage points higher than the national number. During the worst of the recession, the state’s teens faced an unemployment rate above 30 percent.
The empirical data support the harm suggested by these top-line figures. For instance, in a study in Economic Inquiry, economists from the University of Oregon in Eugene found that Oregon’s higher minimum wage generated consistently negative effects on employment in the restaurant industry.
Raising the state’s mandated wage floor further, whether in a three-tiered approach or all at once, will only compound this damage. The takeaway from Oregon’s past experiments with the minimum wage is clear: Trailblazing on minimum wage levels is a dangerous venture.
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Employment Policies Institute