Round Numbers Make Bad Public Policy

Liberal politicians locally and across the country are racing to hike their minimum wage to $15. Oregon requires all employers to pay the second highest minimum wage in the country, but the same law prohibits any Oregon county or city from setting its own minimum wage above the state’s current $9.25.

Determined to join the Fight for 15 movement, Eugene City Council is considering a $15 minimum for all its own employees and for the employees of any vendor doing business with the city. A state initiative is getting organized to hike Oregon’s minimum to $15.

Fifteen is not the correct number and I’ll tell you why.

Round numbers convey a casual attitude about money that is unbecoming when mixed with police powers. If you’re opening a classy restaurant, you can tell your customers that you don’t care about pennies by pricing your entrees at whole-dollar amounts.

The biggest difference between “$20” and “$19.99” is not the penny — it’s the attitude. Wal-Mart won price-conscious shoppers’ allegiance by breaking from retailers’ 99-cent convention and using every digit. A price like $8.74 connotes that they are saving every penny they can on their customers’ behalf — $9.00 does the opposite.

Fifteen-zero-zero succeeds as a slogan for the same reason it fails as public policy. It’s too simple. Give me a number that uses all available digits if you want me to believe you paid attention to details.

Besides, the $15 figure came from our maximum-minimum competitors to the north. After an attempt to unionize airline support vendors was foiled at Seattle’s Sea-Tac airport, activists put the $15 minimum on the ballot in the airport’s host city. It was easy to remember, the initiative passed, and the number stuck.

I don’t know about you, but it goads me that Washington state’s minimum wage is always a few cents higher than ours in Oregon. Every year, we of the Upper Left Edge offer Americans the highest of lowest wages, but we’ve been second every year since 2001.

That’s not how it was supposed to be. After all, we got there first.

In 1996, Oregon voters passed Measure 36, raising our minimum wage (over three years) to $6.50. When our northern neighbors saw that civilization did not collapse beneath them, Washington followed our (ahem) lead in 1998 with Initiative 688, which increased their minimum wage to $6.50 over two years, but also added a cost-of-living adjustment based on the federal Consumer Price Index.

Not to be outdone, Oregon followed in 2002 with another ballot initiative, Measure 25, which decreed another statewide increase — this time to $6.90 and yes, this new minimum was indexed to the Consumer Price Index for every year after 2003.

But by then it was too late. Our $6.90 in 2003 was bettered by Washington’s inflation-adjusted $7.01. In 2015, Washington pays a minimum of $9.47, compared to our paltry minimum of $9.25. That gap will only widen with time, so something must be done if we want our state’s economic ladder to reclaim the nation’s highest lowest rung.

Oregon can show the nation a better way, and Eugene City Council can nudge Salem legislators in the right direction by using a number that has been shaping public policy for decades. We want every member of our full-time workforce to be not-poor, so we should simply use the numbers that are already available.

The United States Census Bureau calculates the federal poverty level every September for the next calendar year. Its figures are used for federal budgets, block grants, and a host of other initiatives, both public and private. It calculates that an American family of four living for a year on $24,250 or less is officially poor. As an hourly wage, that comes to $11.66.

We want our minimum to be above any line labeled as poverty, so let’s add 20 percent. Consider it like a fair restaurant tip. Eugene, and then Oregon, can declare the current non-poor minimum hourly wage to be $13.99. That’s not a bumper sticker number. It’s a “we did our homework” number.

==

Don Kahle (fridays@dksez.com) writes a column each Friday for The Register-Guard and blogs at www.dksez.com.