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Oregon’s hiked minimum wage will lead to massive job losses for student workers

Oregon lawmakers evaded economic reality when they passed a minimum-wage hike that the state’s public universities can’t afford to pay.

As a result, Oregon State University plans to cut 650 to 700 student jobs by the 2019 fiscal year, including “research that involves student employees,” spokesman Steve Clark told The Oregonian:

For the Beavers, the extra wages due to students in the next biennium would be at least $4.8 million. …

OSU has more than 7,800 student positions, and more than half of them pay less than what will become the new minimum in July.

Assuming “more than half” is 4,000, OSU would cut about 1 in every 6 minimum-wage jobs.

Here’s the new wage structure:

The first step of Oregon’s new wage law goes into effect in July, when the minimum wage will increase 50 cents, to $9.75 an hour. Hourly pay will eventually rise to $14.75 inside Portland’s urban growth boundary, $13.50 in midsize counties and $12.50 in rural areas by 2022.

The Oregonian says student work hours are also likely to be cut, much as colleges did following the implementation of Obamacare to avoid having to cover student workers’ insurance:

Officials will likely turn to another frequent source of revenue to make up the difference: tuition dollars.

At the University of Oregon, where the Board of Trustees just voted to raise tuition by 4.8 percent for in-state students in the fall, the new wage will cost an extra $432,779 to implement during the 2017 fiscal year alone [and $6.1 million by the 2021-23 biennium].

Other schools aren’t sure how many jobs they’ll need to shed but they already have estimates of the extra costs: $2.5 million more in the next biennium for Portland State University, $450,000 for Western Oregon, $299,272 for Southern Oregon and $162,907 for Eastern Oregon.

Read the story.

h/t George Leef

RELATED: More than 200 colleges slash work hours to avoid Obamacare employer mandate

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