Oregon’s experience with minimum wage should mute Montana nay-sayers

The Wall Street Journal has a story up about Oregon’s experience with its recent minimum-wage hike. In it, you will recognize some familiar arguments about Montana’s proposed hike:

During the 2002 debate in Oregon, foes of a minimum-wage increase argued that it would chase away business and cripple an economy that traditionally had higher unemployment than the national average. “With so many Oregonians already unemployed, raising the minimum wage and then increasing it annually would devastate our economic recovery,” Bill Perry, head of the Oregon Restaurant Association, wrote at the time.

So…did the initiative kill the state’s economy? Job growth?

Four years later, though it is impossible to say what would have happened had the minimum not been raised, Oregon’s experience suggests the most strident doomsayers were wrong. Private, nonfarm payrolls are up 8% over the past four years, nearly twice the national increase. Wages are up, too. Job growth is strong in industries employing many minimum-wage workers, such as restaurants and hotels. Oregon’s estimated 5.4% unemployment rate for 2006, though higher than the national average, is down from 7.6% in 2002, when the state was emerging from a recession.

The rest of the article bends over backwards to prove the results wrong with theoretical and anecdotal evidence. As you’d expect.

Kevin Drum notes that the only industry that would be impacted is agriculture. (And that should be a concern in this state.)

But guess what? Higher wages are what we’re going to get if we seriously cut down on immigration too. So conservatives need to make up their mind: either we need cheap fruit pickers, in which case agriculture should be exempt from the minimum wage and we should allow plenty of immigrants across the border to follow the harvests, or cheap labor isn’t critical and we do neither. Which is it?

It’s an interesting point. Let’s see if conservative action follows conservative rhetoric.

Posted by touchstone

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  1. I know of no real-world laboratory where right wing and libertarian theory on minimum wage has held up. They’re in la-la land.

    If you follow their logic to its logical conclusion, the lower the wage we pay, the higher will be business profits and the lower unemployment rate will be. That would be good for everyone. The only thing they seem to miss is that people cannot live on unreaonably low wages, but that would not be reflected in economic statistics.

    Anyway, once again in the real world higher wages for lower rung workers did not hurt anyone.




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