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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

6

8

10

12

14

16

       $      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

7

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.