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Wrong kind of farm aid.

Byline: The Register-Guard

Oregon's inflation-indexed minimum wage - second-highest in the nation behind Washington's - is intended to help low-income workers keep pace with the steadily increasing costs of essentials such as fuel, food and health care.

But annual increases in the minimum wage are having the opposite effect on the state's agriculture industry, taking increasingly bigger bites out of farmers' income and causing double-digit reductions in overall farm employment.

There's little disagreement about the problem, but the agriculture industry's first crack at a legislative remedy - Senate Bill 1083 - takes the wrong approach to a solution. The bill deserves its place on Gov. Ted Kulongoski's most recent "intent to veto" list.

Senate Bill 1083 attempts to insulate agricultural employers from the automatic increases in the minimum wage since inflation indexing was approved by voters in 2003. Prior to indexing, the state minimum wage stood at $6.90 per hour; it's currently at $7.25. The bill would establish a new state income tax credit to reimburse agricultural employers for wages paid above $6.90.

The issue SB 1083 tries to address is real and serious. Labor is the single highest cost for Oregon farmers, and can represent up to 70 percent of all expenses for labor-intensive crops such as berries and tree fruit. Since 1990, when Oregon farm labor expenses amounted to a little over half of net farm income, labor costs have skyrocketed to twice net farm income in 2003.

These costs can't be passed on to consumers, because the global market sets the price for farm commodities, and Oregon is competing with lower-wage producers in other states and countries. In the short run, the only thing Oregon farmers can do is employ fewer workers, and that's why farm jobs are down by 14 percent since minimum wage indexing began in 2003.

Unfortunately, the solution sought by SB 1083 is to pass the costs of farm labor on to the taxpayers, to the tune of $244 million over the four-year span of the bill. To avoid being construed as providing farmers with an incentive to keep employees at minimum wage, the bill's language includes all farm workers in all agricultural operations. That provides a tax credit for every farm, regardless of size or need, and includes almost 46,000 farm workers, many making far more than minimum wage.

It doesn't make sense to use scarce tax dollars to reward large, wealthy agribusinesses when the actual objective is to help struggling family farmers stay competitive. Then there's the "me-too" dilemma. Even though farmers have the best argument for minimum-wage relief, they don't have the only argument. Family-run fishing businesses, restaurants, day-care centers, furniture stores, hotels and motels could all make a strong case for inclusion in a program that eases the burden of an indexed minimum wage.

Many farmers need help coping with increases in the minimum wage, and the next Legislature should make it a priority to determine the best and fairest way to accomplish that. But despite the likelihood that political opponents will try to paint him as "anti-farmer," Kulongoski should veto SB 1083. The taxpayers shouldn't be paying the wages of farm workers.
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Title Annotation:Editorials; Governor should veto minimum wage tax credit
Publication:The Register-Guard (Eugene, OR)
Article Type:Editorial
Date:Aug 28, 2005
Words:524
Previous Article:LETTERS IN THE EDITOR'S MAILBAG.
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