High minimum-wage states lure workers
02/16/2014 12:27 AM
02/16/2014 12:28 AM
Carly Lynch dreams of a life one day on the professional rodeo circuit, but for now she commutes 20 miles from Idaho to this small city in eastern Oregon to work as a waitress. There are restaurant jobs closer to home, but she is willing to drive the extra miles for a simple reason: Oregon’s minimum wage is $1.85 higher per hour than Idaho’s.
“It’s a big difference in pay,” said Lynch, 20, who moved last summer from her parents’ home in Boise, 30 miles farther east, to make her Oregon commute more bearable. “I can actually put some in the bank.”
In the nation’s debate about the minimum wage, which President Barack Obama has proposed increasing at the federal level to $10.10 from $7.25, this rolling borderland of onion farms and strip malls provides a test tube of sorts for observing how the minimum wage works in daily life and how differences in the rate can affect a local economy in sometimes unexpected ways.
Lynch is one of the many minimum-wage migrants who travel from homes in Idaho, where the rate is $7.25, to work in Oregon, where it is the second highest in the country, $9.10. Similar migrations unfold every day in other parts of Idaho – at the border with Washington, which has the highest state minimum, $9.32, and into Nevada, where the minimum rate tops out at $8.25.
Their experiences underscore what many proponents of raising the wage assert: that even seemingly small increases in pay can galvanize people’s lives, allowing workers to quit second jobs, buy cars or take vacations.
And although some business owners along the border said raising the minimum wage could keep them from adding extra employees, they also said larger economic forces were more important. For example, minimum-wage service jobs in stores, restaurants and motels have boomed on the Oregon side, despite its higher rate, mostly because Oregon has no sales tax.
Wages, prices linked
The competition for workers has in turn forced many businesses on the Idaho side to raise their wages.
“I have to offer more to my employees to keep them,” said Steven Lindsay, owner of Main Street Automotive, a repair shop in Payette, Idaho, 6 miles from Ontario. “People are going to go to where the money is. You can’t blame ’em. They have to make a living.”
But opponents of raising the minimum wage can also point to evidence here of negative, or uneven, consequences. When wages go up, they say, prices do as well. And a question resonates here no matter what side you are on: Can any region dependent on the minimum wage ever fully prosper?
Todd Heinz, who owns three coffee shops called Jolts and Juice with his wife, Vicki – two on the Oregon side, one in Idaho – likened the result to a treadmill when Oregon’s wage went up Jan. 1 by 15 cents under an automatic system linked to the cost of living. (Oregon is one of 10 states that link their minimum wage to the Consumer Price Index.) After raising the pay for his 24 employees, he raised the prices for coffee, smoothies and beer to compensate.
“It feels like a wash,” he said. “It is not the consumer that wins, because most businesses will pass their increase on to the consumer through higher prices. The business doesn’t win, because they are forced to increase their prices to maintain proper margins to keep their doors open, thus affecting current customers and the potential of loss of new business. The employee doesn’t win, because they are the consumer.”
States are allowed to mandate minimum wages higher than the federal rate, and 21 have done just that. (Oregon’s wage has been higher than the federal minimum since the early 1990s.) Twenty states have kept to the federal standard, including Idaho, which has the highest percentage among all states of hourly workers earning the minimum wage or less, according to federal figures.
Lynch’s story illustrates some of the competing narratives of the minimum wage debate. When she took her Oregon job last year, at an Irish-themed restaurant and bar called Mackey’s, she got more hours at higher pay, allowing her to compete in more barrel-racing events, her rodeo specialty. Two months ago, she even bought a second horse, a gelding paint named Blue Duck.
But Mackey’s owners also told her that she would have to work harder than before for that money. Higher labor costs meant getting rid of the dishwasher, for one thing, said Angena Grove, who owns the restaurant with her husband, Shawn. And whereas Lynch covered three tables at a time in her old Idaho job, Mackey’s waitresses, with the owners helping out, cover five.
“You work for the money,” Lynch said.
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