median wage policy with oed data
TRANSCRIPT
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MEDIAN WAGE POLICY A N A L T E R N A T I V E T O R A I S I N G T H E M I N I M U M
W A G E I N O R E G O N
Upward
Mobility for Oregonians
November, 23 2015Jessica L. GomezFounder & CEORogue Valley Microdevices, Inc.
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Minimum Wage Increase
Why increase minimum wage?
Help more workers earn a living wage
Increase revenue for the State through income tax
Prevent taking advantage of low wage workers
Decrease workers dependency on Oregon’s safety net programs
Risks
Increase unemployment especially in Youth and People withDisabilities
Increase dependency on state and federal safety net programs
Reduce opportunities for paid internships and other opportunities togain key work experience
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Minimum Wage Increase
Impact on Small Business and Oregon’s Economy
Higher costs for family-owned businesses and small companies
More difficult for Oregon manufacturers to be price competitive in a globalmarket
Higher cost of on-the-job training Increased cost of products and services within Oregon
Impact on Local Non-Profit Organizations and Higher Education
Increase administrative costs
Less overall dollars available for delivering vital NGO services Students will carry higher education cost increases in higher tuition and
student debt
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Median Wage Concept
How do we encourage better wages andsupport job growth?
Step 1) DO NOT increase the MINIMUM wage
Step 2) Introduce a MEDIAN wage
By introducing a median wage, we can achieve the benefits of an
increased minimum wage without many of the unintended consequences.
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Median Wage Concept
Consider “ABC Manufacturing Company” with 60 Employees
TodayOnly 10% of the employees are compensated at $15.00 per hour or greater
Let’s Assume that Minimum remains at $9.25 per hour
Median wage is established at $15.00 per hour
After Median Wage Implementation50% of all employees are compensated at $15.00 per hour or greater
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Current Wage Distribution
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2
4
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$ 9 . 0 0
$ 1 0 . 0 0
$ 1 1 . 0 0
$ 1 2 . 0 0
$ 1 3 . 0 0
$ 1 4 . 0 0
$ 1 5 . 0 0
$ 1 6 . 0 0
$ 1 7 . 0 0
$ 1 8 . 0 0
$ 1 9 . 0 0
$ 2 0 . 0 0
$ 2 1 . 0 0
$ 2 2 . 0 0
$ 2 3 . 0 0
$ 2 4 . 0 0
$ 2 5 . 0 0
$ 2 6 . 0 0
$ 2 7 . 0 0
$ 2 8 . 0 0
$ 2 9 . 0 0
$ 3 0 . 0 0
$ 3 1 . 0 0
$ 3 2 . 0 0
$ 3 3 . 0 0
$ 3 4 . 0 0
$ 3 5 . 0 0
$ 3 6 . 0 0
$ 3 7 . 0 0
$ 3 8 . 0 0
$ 3 9 . 0 0
$ 4 0 . 0 0
$ 4 1 . 0 0
$ 4 2 . 0 0
$ 4 3 . 0 0
$ 4 4 . 0 0
$ 4 5 . 0 0
Employees(count)
EmployeesCumulativePercent
EmployeeCount
Employee Hourly Wages
Median Wage Approx
$11.50/Hr
ABC Manufacturing Company
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Wage Distribution After Median Wage Implementation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
1
2
3
4
5
6
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8
$ 9 . 0 0
$ 1 0 . 0 0
$ 1 1 . 0 0
$ 1 2 . 0 0
$ 1 3 . 0 0
$ 1 4 . 0 0
$ 1 5 . 0 0
$ 1 6 . 0 0
$ 1 7 . 0 0
$ 1 8 . 0 0
$ 1 9 . 0 0
$ 2 0 . 0 0
$ 2 1 . 0 0
$ 2 2 . 0 0
$ 2 3 . 0 0
$ 2 4 . 0 0
$ 2 5 . 0 0
$ 2 6 . 0 0
$ 2 7 . 0 0
$ 2 8 . 0 0
$ 2 9 . 0 0
$ 3 0 . 0 0
$ 3 1 . 0 0
$ 3 2 . 0 0
$ 3 3 . 0 0
$ 3 4 . 0 0
$ 3 5 . 0 0
$ 3 6 . 0 0
$ 3 7 . 0 0
$ 3 8 . 0 0
$ 3 9 . 0 0
$ 4 0 . 0 0
$ 4 1 . 0 0
$ 4 2 . 0 0
$ 4 3 . 0 0
$ 4 4 . 0 0
$ 4 5 . 0 0
Employees(count)
EmployeesCumulativePercent
EmployeeCount
Employee Hourly Wages
Median Wage$15.00/Hr
ABC Manufacturing Company
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Median Wage Outcome
ABC Manufacturing Company Thrives
Their best employees are rewarded with higher wages.
As the company grows, more employees are hired and trained.
Once those employees are trained, they are rewarded with higherwages.
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Median Wage In Oregon
What Does Median Wage Look Like In Oregon?
Let’s Take A Closer Look
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Number of Firms with Median Wage Above or Below $15 PerHour by Broad Industry
Number of Firms Percent of Firms
Oregon, First Quarter 2015 Median WageUnder $15.00
Median Wage$15.00 or more Total
Median WageUnder $15.00
Median Wage$15.00 or more Total
Leisure and Hospitality 7,722 1,576 9,298 83% 17% 100%Retail Trade 5,743 2,464 8,207 70% 30% 100%Professional and Business Services 4,646 12,928 17,574 26% 74% 100%
Other Services 3,996 5,501 9,497 42% 58% 100%Health Care & Social Assistance 3,235 5,874 9,109 36% 64% 100%Construction 2,442 7,436 9,878 25% 75% 100%Financial Activities 2,359 4,825 7,184 33% 67% 100%Natural Resources and Mining 1,930 1,435 3,365 57% 43% 100%Manufacturing 1,927 3,095 5,022 38% 62% 100%Wholesale Trade 1,056 6,123 7,179 15% 85% 100%Transportation, Warehousing, and Utilities 736 1,782 2,518 29% 71% 100%
Private Educational Services 469 1,111 1,580 30% 70% 100%Information 314 1,658 1,972 16% 84% 100%Local Government 193 966 1,159 17% 83% 100%State Government 5 112 117 4% 96% 100%
Total All Industries 36,773 56,886 93,659 39% 61% 100%
Source: Oregon Employment Department, Unemployment Insurance Wage Records
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Number of Firms with a Median Hourly Wage Under or Over$15.00 per hour, By broad Industry
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
Leisure and Hospitality
Retail Trade
Professional and Business Services
Other Services
Health Care & Social Assistance
Construction
Financial Activities
Natural Resources and Mining
Manufacturing
Wholesale Trade
Transportation, Warehousing, and Utilities
Private Educational Services
Information
Local Government
State Government
Median Wage Under $15.00 Median Wage $15.00 or more
Source: Oregon Employment Department, Unemployment Insurance Wage Records
Oregon, First Quarter 2015
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Number of Firms with Median Wage Above or Below $15 PerHour by Size Class
Number of Firms Percent of FirmsMedian WageUnder $15.00
Median Wage$15.00 or more Total
Median WageUnder $15.00
Median Wage$15.00 or more Total
Under 5 employees 17,363 32,548 49,911 35% 65% 100%
5 - 9 employees 8,074 9,916 17,990 45% 55% 100%
10 - 19 employees 5,530 6,305 11,835 47% 53% 100%
20 - 49 employees 3,569 4,301 7,870 45% 55% 100%
50 - 99 employees 1,078 1,441 2,519 43% 57% 100%
100 - 249 employees 651 861 1,512 43% 57% 100%
250 - 499 employees 179 263 442 40% 60% 100%
500 or more employees 140 192 332 42% 58% 100%
Total Private Sector 36,584 55,827 92,411 40% 60% 100%
*Size class is based on number of jobs in Oregon.
Source: Oregon Employment Department, Unemployment Insurance Wage Records
Oregon, First Quarter 2015
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Percent of Firms with a Median Hourly Wage Under or Over $15Per Hour, By Size of Firm, Oregon, 1st Quarter 2015
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Under 5 employees
5 - 9 employees
10 - 19 employees
20 - 49 employees
50 - 99 employees
100 - 249 employees
250 - 499 employees
500 or more employees
Median Wage Under $15.00 Median Wage $15.00 or more
Source: Oregon Employment Department, Unemployment Insurance Wage Records
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Median Wage Outcome For Oregon
Everyone benefits from a policy that ensures there is a wage ladder for workers to climb through education, training, and seniority.
Everyone benefits from a policy that encourages and rewards jobperformance.
Everyone benefits from a policy that reduces the number of working poor
while still embracing the spirit of a free market.