PENDLETON, Ore. – Economist Robert Whelan of ECONorthwest of Seattle says the move in the Oregon Legislature to raise the minimum wage will not just damage employers who have to fork over the extra money. It will also hurt the workers themselves, who will find themselves with less money, not more.
“For every dollar of the minimum wage increase, almost half the money gets either taxed away or lost in reduced earned income tax credit,” he said after his speech at the Pendleton Chamber of Commerce Economic Outlook Luncheon. “Only about 35 cents of it actually gets spent in Oregon.”
The economist says that the proposed minimum wage hike for Oregon will not grow the economy as its supporters insist. It will actually shrink the state’s economy by about three percent. Whelan said that the supporters say they want to do this to help the poor. However, he says there’s a much simpler and more direct way of helping them.
“Why should there be a state income tax on a woman who has two kids and struggles to make ends meet,” he said. “She makes $30,000 a year, she’s got to pay a thousand dollars in state income tax. Why? If you really care about poverty, don’t tax poor people.”