Tag Archives: Economic Policy Institute

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Paying Striking Workers: One More Bad Idea From Oregon Democrats

Dear Oregon Legislators. Who are you going to listen to, the unions or the rest of us?

 Oregon Democrats, at the request of the AFL-CIO union, have introduced a bill, SB 916, that would allow striking workers in Oregon to collect unemployment benefits. Because the Unemployment Insurance Trust Fund is funded through a payroll tax that is paid by employers, Oregon employers would be paying workers not to work.

Public hearings on the bill before the Senate Committee on Labor and Business were held on Feb. 6 and Feb. 11, 2025.  Union supporters, particularly representatives of nurses and educators, uniformly endorsed the bill. Pretty much everybody else opposed it. 

The bill is sponsored by Democratic Senators Kathleen Taylor, Wlnsvey Campos, James I. Manning, Jr., Chris Gorsek, Mark Meek, and Deb Paterson, as well as Democratic Representatives Dacia Graber and Ben Bowman. 

The unemployment insurance program, as the state explains, ”provides partial wage replacement benefits to eligible workers who are unemployed through no fault of their own.” It is not, and was never intended to be, a source of money to compensate workers for refusing to work.

Daniel Perez with the Economic Policy Institute, founded with a pledge from eight labor unions, delivered written testimony before the Committee in support of SB 916. Ignoring the issue of whether paying strikers made sense, Perez argued that it would “result in minimal costs to the state of Oregon “and “would ensure that critical dollars continue to flow into local businesses and communities during strikes.”

Perez argued that over half of strikes end within two days and over the past four years, the median strike duration in Oregon has been five days. Therefore, the bill’s requirement that there be a 7-day waiting period before striking workers would be eligible to apply for benefitsmeant few would qualify. This , of course, ignored the issue of whether strikes would be prolonged if strikers were paid.

The Oregon School Boards Association (OSBA) asserts, for example, that if Portland Public Schools teachers went on a one month strike in 2025, it would cost the Portland school district $8.7 million if SB 916 were law at a time when the district is already struggling financially. ,

Nurses also testified in support of the bill. “By not allowing unemployment benefits, workers are being discouraged from using their legal right to collective action, creating an advantage for employers,” said one nurse. “Many healthcare workers are forced into an indefinite labor dispute without financial support, making it almost impossible to stand up for necessary changes that need to happen in the workplace.”

Individual critics were more blunt, and more persuasive.

“Are you seriously attempting to KILL businesses in Oregon?” said one. 

“Stop this wasteful spending on foolish bills.,” said another. “Passing of bills such of this will only benefit the greater Idaho movement and have more business and people move out of the state.”

 “This bill appears to be an attempt by certain politicians to woo the union vote, who will in turn donate more money to their campaigns (quid pro quo),” said another. 

“When two parties are negotiating, the cost to both sides needs to be heavy or a settlement won’t be reached.,” said another. “Paying striking employees removes the incentive to reach an agreement quickly.”

A coalition of business groups, the Oregon Farm Bureau, the Oregon Forest Industries Council, chambers of commerce, the Oregon School Boards Association and others said the bill would be “putting the state’s thumb on the scale in what should be a negotiation process between workers and employers.” Further, “If public unions strike, the impact to state (or school district, local government) budgets could be catastrophic. This is particularly alarming given the number and frequency of recent teacher strikes.”

Local governments were also outspoken in opposition to the bill. 

“At a time when local governments and businesses are grappling with tight budgets, these additional expenses would place further strain on employers who already face rising costs for wages, benefits, and regulatory compliance,” said the Marion County Board of Commissioners. “This could lead to higher taxes, service reductions, or even layoffs, the very scenario that unemployment benefits are meant to mitigate.”

The City of Hillsboro was strongly opposed as well. “This bill provides an unfair advantage to labor in a dispute by forcing all employers to fund the act of striking (or other labor disputes) and undermining the purpose of a strike,” the city said.

In my view, the arguments against paying strikers unemployment benefits clearly win out. 

But, given the tendency of Oregon’s Democratic legislators to appease unions, which overwhelmingly bankroll Democrats, the bill may still well go forward.  If it does, Portland won’t be the only part of the state in a “doom loop”. The bill would be one more nail in the coffin of the entire state’s competitiveness. 

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The fatuous fight for $15

mcdonalds

Hold the burgers, hold the fries! MAKE OUR WAGES SUPER SIZE!!! ‪#fightfor15

 

New York’s Gov. Andrew Cuomo announced earlier this month that he would set a $15 minimum wage for all state workers on his own and without legislative action.

Cuomo’s move will give raises to about 10,000 state workers, adding $20.3 million annually to state spending by the time the increase is fully phased in.

What the heck. No skin off his nose. The state doesn’t have to make a profit. Take it out of taxpayers’ pockets.

That seems to be the attitude of a lot of folks these days. Wages have been stagnant for years for most people and inequality is the topic de jour. Let’s give a whole bunch of people a raise.

But whatever people say to pollsters about their support for higher minimum wages, that doesn’t necessarily translate into a willingness to pay the higher prices for goods and services that often result.

Furthermore, a sweeping across-the-board $15 an hour mandate that might be bearable for a business in Portland also might be devastating for a small business in Astoria, Echo or Pendleton.

The Economic Policy Institute, a left-leaning policy organization with ties to the organized labor movement, says, “All workers deserve a wage sufficient to support themselves and their family.”

The problem is that the minimum wage was never intended to be enough to support a family and that even a $15 minimum wage would still be a long way from achieving that goal.

In Oregon, for example, a family of four needs to earn about $64,000 for a reasonably comfortable living. A $15 an hour wage in a full-time 40-hr week would translate into an annual income of just $31,200.

It’s not even clear that raising the minimum hourly wage to $15 would be a clear victory for all the poor. It would certainly raise the wages of many workers, but it would also likely lead to the elimination of many jobs traditionally open to unskilled minimum-wage earners. In addition, most of the benefits of an increase to $15 an hour would not go to people actually living in poverty.

In fact, about 50 percent of current minimum-wage workers are under 25, and about 25 percent are teenagers. The unemployment rates of both groups are already higher than the 5 percent national unemployment rate.

People without a job are much more likely to be living in poverty than those who are employed. Furthermore, many of those earning less than $15 an hour today are not the primary breadwinners in families. That being the case, a better way to address poverty would be to work harder to position the unemployed for the workforce and to target income supplements on low-income families through such programs as the Earned Income Tax Credit.

When I see a plaintive story about Suzie, a fast food worker who protests that she’s been working at the counter for 4 years and hasn’t seen any substantial raises, my first thought isn’t, “Well, double Suzie’s pay, youInstead, I think, “How can you justify a big jump in pay to someone who has been performing the same low-skill job for 4 years, with no increase in her expertise and no increase in her productivity that enhances the company’s bottom line?” That may sound brutal, but it’s how things work at every single successful company. It can’t be otherwise.

Supporters of the $15 an hour minimum wage also err when they say it won’t cost much. A $15 an hour minimum wage would not happen in isolation. There would be a cascading effect on other workers, thus a greater cost impact on the employer.

If you raise the hourly pay of the McDonald’s crew from $9.25 to $15 an hour, a 62 percent increase, can you leave the shift manager’s pay at $10.20 an hour, and so on up the ladder?

At some point a franchise owner will say, “enough!” McDonalds has tested automated self-service kiosks that have been shown to reduce customer wait times and generate higher sales than ordering from workers at the counter asking, “Do you want fries with that?” That may be the future if we go down the $15 road?