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The new Oregon minimum wages impact on the Cleaning Industry

Minimum wage currently is $9.25 in Oregon. This past March 2016 a new law was signed in the state of Oregon. The minimum wage will go up in phases over the next 6 years in July. By July, 2022 it will be $14.75.

Starting this July 1, 2016: Oregon will no longer have a standard minimum wage across counties. Instead, there will be three wage areas: Metro, Standard and Nonurban. In the Portland metro area, defined as the land within Metro’s Urban Growth Boundary, the minimum wage rises to $9.75-an-hour Friday. For the Standard area, places such as Eugene-Springfield, Medford, Corvallis, the Northern Coast and Bend, the rate will also rise to $9.75-an-hour. But in the rest of the state, some 18 counties defined as Nonurban and which includes all of of Eastern Oregon, the minimum will increase to $9.50-an-hour.

So by 2022, the Standard rate will be $13.50, Portland Metro will be $14.75, and Nonurban counties will be $12.50.

These higher minimum wages will make the highest statewide minimums in America. The next highest are Washington DC $10/hour, and Massachusetts at $11/hour next year.

The Oregon legislature has done this before ballot measures were put to the people. It was presumed that people would have phased in the higher wages faster or have even a higher minimum wage altogether too.

Already the city of Portland has increased the minimum wage for city workers and contractors to $15 an hour, currently the highest minimum wage anywhere in the country. The policy applies to about 20 contractors that employ parking attendants, security guards and janitorial staff at city-owned and -operated building.

How will all this impact low wage industries like the cleaning industry?

Some critics say that companies will have to cut jobs to deal with the higher costs of labor.  There have been some studies in the fast food industry that have not have had job cuts. They were able to have higher economic growth, charged more to the consumer, and had lower turnover.

The phased increments of the minimum wage should help adjust to the new higher labor costs. Small business should be able to absorb costs initially. The fact that all business will be in the same economic environment will prevent the consumer to go to competitors. Will the consumer spend less? Yes, maybe but janitorial services are a necessity.

While most janitorial companies are already paying above the minimum wage in most areas, $15 is still an industry high. In the end, cleaning companies will also have to deal with less profits as they cannot put all cost increases on the client.