Cost of $15 minimum wage hike could be too onerous

A Portland economist writes that hiked spending by workers wouldn’t offset costs for owners.

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A recently-published white paper could put a damper on the momentum for a $15 minimum wage in Oregon.

Portland economist Robert Whelan of ECONorthwest writes that even with a hike in spending from workers, the revenue wouldn’t offset payroll costs for owners.

Using tax software, Whelan found that a hypothetical Portland single-parent family with one child would only gain about half as much in disposable income as employers would spend in added pay and taxes.

The minimum-wage earner would see their pay increase by $11,500, to $30,000 a year. But Whelan says it would also push the worker into a higher tax bracket, which would gobble up $4,500, or 39 percent, of the additional income and leave them with about a $7,000 bump.


Oregonian reporter Molly Young found a policy leader who called the findings “simplistic.”

Chuck Sheketoff, who leads the Oregon Center for Public Policy, challenged that conclusion, saying that calculating the costs and benefits of raising the minimum wage isn’t so easy. For one, government spending would likely also increase as workers paid more in taxes. 

What do you think? Could your business weather a drastic increase to the minimum wage?


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