Posted on 04 April 2016.
Oregon’s recent decision to raise the minimum wage may ease some of the financial burden for students — but it could also lead to some drastic changes for the University of Oregon and minimum wage jobs on campus.
Oregon’s minimum wage will incrementally increase over the next six years. The most recent increase will take effect on July 1 at $9.75 per hour. By the end of the hikes, the base wage for Oregon will be $13.50 in midsize counties and $12.50 in rural areas.
Nationally, young adult employees (16-24) make up the largest portion of minimum wage workforce – about half according to a 2014 Bureau of Labor Statistics report. The State of Oregon Employment Department estimated last year that there are about 100,000 minimum wage jobs in the state. Based on the national average, about 50,000 college-aged Oregonians fill these positions.
Still, the UO’s preliminary estimates show that by next year, the UO could be paying student workers up to $413,546 more in total wages, UO spokesperson Tobin Klinger said, and that number climbs as high as $5.8 million by the end of the scheduled wage hike.
It’s notable that these numbers are only estimates, and they assume that the same number of students will continue to be working for the UO. For the last academic year, that number was about 4,000 students per month. Also, some students often only work for the UO for a term or less, further muddying the numbers.
- 100,000 – minimum wage jobs in the state of Oregon
- 50,000 – minimum wage jobs occupied by college-aged Oregonians
- $413,546 – increase in total wages for student workers at the UO next year
- $5.8 million – increases in total wages for students in the final year of the scheduled wage hike
- 4,000 – rough estimate of student employees working for the UO
“Obviously, this is a cost that we anticipate, but there are a lot of things to consider with this,” Klinger said. “For one, we have to consider that the number of students that the university hires may go down. By how much is hard to calculate because employment is determined departmentally.”
University Housing – one of the largest employers of students on campus – will have a much higher demand for minimum wage workers than, say, the Outdoor Program.
UO associate economics professor Benjamin Hansen said that it’s possible we’ll see the university employ fewer students and that “there will be fewer hours to go around.”
Klinger said it’s difficult to account for compression, which is when minimum wage workers will suddenly be making more than other workers in the same or similar job who have worked there longer. These employees’ wages would also likely need to increase, leading to further costs.
Caden Williams, a UO sophomore studying computer science, works as an office assistant for the the Office of Student Life on campus. He works for minimum wage doing general office tasks like answering the phones and emails, but he also helps with a lot of the hands-on setup for major events on campus such as graduation commencement.
Williams said that his minimum wage paycheck helps with financial strain.
“The money helps a lot with buying textbooks and some other school supplies,” Williams said.
An out-of-state student, Williams said that any extra income helps pay for the higher tuition costs.
“I’ve taken out every federal loan I possibly can and have some recurring scholarships,” Williams said. “Any amount of money from working helps me financially. I think that this minimum wage increase will do a lot to help other students like me.”
If the university will be forking out more cash to its employees, it will have to find a way to manage these costs. With tuition hikes fresh on everyone’s minds, it is natural to wonder if a higher minimum wage will bring even higher tuition.
Klinger said that while tuition increases are a way to bring in more revenue, the budgeting board factors in a lot more costs than just wages in tuition decisions.
Theodora Thompson — currently the UO chapter president of the Service Employees International Union, the group that lobbied heavily for a minimum wage increase bill – said that a wage increase can be an offset for higher tuition and costs associated with college.
“This increase will help students meet the costs of rising tuition,” Thompson said.
Originally from Singapore, Thompson came to the UO in 1995, when the minimum wage was $4.75 per hour. She recalls struggling to get enough hours to pay for the costs of living and going to school.
“I was working for a fast-food company at the time and couldn’t find enough hours to get a bigger paycheck,” Thompson said. “Once I graduated and began to work for the university, I saw an opportunity within the union to speak on behalf of those experiences.”
Sam Coffaro is also an out-of-state student. Originally from Pittsburgh, she moved to Thousand Oaks, California, and later started college at California Lutheran University. She transferred to the UO to study advertising last year.
Coffaro has a minimum-wage job as a building monitor at Allen Hall on the UO campus, cleaning classrooms and maintaining facilities. She also works seasonally for the Duck Store during the textbook rushes to make extra cash. The Duck Store’s employees are not paid by the university.
“Minimum wage isn’t really enough to live on,” Coffaro said. “If you have a car to pay off and rent on top of all the school costs, it’s just not enough to make you financially independent.”
Coffaro is trying to do just that – make herself financially independent – a requirement to apply for in-state tuition, something that would save her a lot of money while attending the UO.
Because tuition at the UO for the 2016-2017 school year was fixed before the statewide minimum wage increase, this next year will will act as a sort of trial run for how the increases — which begin in July — will play out in the future. Beginning next year, the university will likely have a clearer picture of how the increases will affect tuition.
The new law breaks the state down into different economic areas, with the largest increases happening in the Portland metro area, where the minimum wage will be $14.75 by 2022. The wage hikes will be spread out over a six-year span, giving time for businesses and industries to adjust to higher labor costs.
“We are appreciative of the legislature phasing in these increases incrementally,” Klinger said. “This gives us time to work with lawmakers to find other ways of providing funding and revenue for our public universities.”