Portland, Ore. – Oregon Center for Public Policy released today A Higher Minimum Wage Works for Small Businesses, a new study that shows small businesses in Oregon could benefit from a higher minimum wage. The Oregon legislature is currently considering a number of proposals to increase the minimum wage, including House Bill 2009 and Senate Bill 610 which would raise the wage to $15 an hour by 2018.
“This study shows that raising the minimum wage can go hand in hand with strong job growth for small businesses,” said Senator Sara Gelser. “With multiple proposals on the table right now, it’s critical that we give real thought at what it will take to make a meaningful difference in the lives of Oregon families.”
Key findings from the report include:
+ Experience shows small businesses do fine with higher minimum wages. Oregon raised the minimum wage three times from 1989 to 2002, not counting the annual inflation adjustments that began in 2004. During that time, the small business sector showed mostly uninterrupted growth, with contractions seemingly tied to the business cycle, not to minimum wage increases. Between 1988 and 2007, right before the start of the Great Recession, businesses with fewer than 20 employees grew by more than a third, as did jobs in those businesses.
+ Small business jobs paying under $15 account for a small share of all Oregon jobs. There are about 1.9 million jobs in Oregon. There is no universal definition for the term “small business,” though a common definition is businesses that employ fewer than 50 people. Under that definition, there are about 292,000 small business jobs in Oregon that pay less than $15 an hour. That amounts to about 16 percent of all jobs in the state.
+ Most workers who would receive a wage increase work at larger businesses. Of all jobs in the state paying under $15 per hour, what share corresponds to larger businesses? The answer is the majority of such jobs—62 percent—assuming that small businesses are those with fewer than 50 employees. Therefore, most workers who would see a wage increase as a result of a $15 per hour minimum wage in Oregon work at a larger business.
+ Employers experience productivity gains from a higher minimum wage. Researchers have found that a higher minimum wage yields savings to employers in the form of higher productivity and other efficiencies. Oregon small business owners can expect such benefits from a higher state minimum wage.
Small business owners from across the state have joined proponents in calling on the Oregon Legislature to pass a higher minimum wage.
“Better wages make for more satisfied, more motivated, and overall more productive employees,” said Mark Kellenbeck, Co-owner of BrainJoy in Medford, and Co-Chair of The Main Street Alliance of Oregon. “We have consistently found that better wages both attract and retain superior employees.”
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