States with higher minimum wages lure workers

02/16/2014 12:17 AM

02/16/2014 12:18 AM

Carly Lynch dreams of a life one day on the professional rodeo circuit, but for now she commutes 20 miles from Idaho to this small city in eastern Oregon to work as a waitress. There are restaurant jobs closer to home, but she is willing to drive the extra miles for a simple reason: Oregon’s minimum wage is $1.85 higher per hour than Idaho’s.

“It’s a big difference in pay,” said Lynch, 20, who moved last summer from her parents’ home in Boise, 30 miles farther east, to make her Oregon commute more bearable. “I can actually put some in the bank.”

In the nation’s debate about the minimum wage, which President Barack Obama has proposed increasing at the federal level to $10.10 from $7.25, this rolling borderland of onion farms and strip malls provides a test tube of sorts for observing how the minimum wage works in daily life, and how differences in the rate can affect a local economy in sometimes unexpected ways.

Lynch is one of the many minimum-wage migrants who travel from homes in Idaho, where the rate is $7.25, to work in Oregon, where it is the second highest in the country, $9.10. Similar migrations unfold every day in other parts of Idaho – at the border with Washington, which has the highest state minimum, $9.32, and into Nevada, where the minimum rate tops out at $8.25.

Their experiences underscore what many proponents of raising the wage assert: that even seemingly small increases in pay can galvanize people’s lives, allowing workers to quit second jobs, buy cars or take vacations.

And although some business owners along the border said raising the minimum wage could keep them from adding extra employees, they also said larger economic forces were more important. For example, minimum-wage service jobs in stores, restaurants and motels have boomed on the Oregon side, despite its higher rate, mostly because Oregon has no sales tax.

The competition for workers has in turn forced many businesses on the Idaho side to raise their wages.

“I have to offer more to my employees to keep them,” said Steven Lindsay, owner of Main Street Automotive, a repair shop in Payette, Idaho, 6 miles from Ontario. “People are going to go to where the money is. You can’t blame ‘em. They have to make a living.”

But opponents of raising the minimum wage can also point to evidence here of negative, or uneven, consequences. When wages go up, they say, prices do as well. And a question resonates here no matter what side you are on: Can any region dependent on the minimum wage ever fully prosper?

States are allowed to mandate minimum wages higher than the federal rate, and 21 have done just that. (Oregon’s wage has been higher than the federal minimum since the early 1990s.) Twenty states have kept to the federal standard, including Idaho, which has the highest percentage among all states of hourly workers earning the minimum wage or less, according to federal figures.

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