Month: March 2013

Indiana Supreme Court Says Vouchers Directly Benefit Families, Not Institutions

On Tuesday the Indiana Supreme Court affirmed the constitutionality of Indiana’s school voucher law. The court rejected the plaintiffs’ argument that the law improperly benefited private religious schools, violating the state constitution’s Blaine Amendment. Blaine Amendments, found in state constitutions around the country, prohibit state treasury money from being used explicitly for the benefit of religious institutions.

The unanimous decision in Meredith v. Daniels stated: “The voucher program expenditures do not directly benefit religious schools but rather directly benefit lower-income families with school children by providing an opportunity for such children to attend non-public schools if desired.” Indiana Judge Michael Keele noted that scholarship recipients can “choose to use the funding for education at a public, secular private, or religious private school.” The choice is up to families. This interpretation is supported by the U.S. Supreme Court’s decision to uphold Cleveland, Ohio’s voucher program in 2002.

The Indiana Choice Scholarship Program is the largest voucher program in the country: More than half of Indiana’s population qualifies to participate. Currently, 22 states and the District of Columbia have some type of private school choice measure, but Oregon still does not. Isn’t it time that Oregon parents had more power to choose where and how to educate their children?

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.

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To Fluoridate or Not to Fluoridate?

Please join us for Cascade’s monthly Policy Picnic, led by Dr. Char Glenn, on Wednesday, April 17, at noon.

Portlanders can vote this May on whether the City Council should fluoridate the water for 900,000 people.  Dr. Glenn will explore better ways to grow and keep healthy teeth and explain the differences between water fluoridation chemicals and the fluoride in your toothpaste. She also will address concerns about individual autonomy, one of the reasons most countries in Europe do NOT fluoridate.

Char Glenn is an internal medicine physician practicing in Northwest Portland.  She focuses on prevention of future medical problems and addresses the root causes of problems when they occur.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Patrick Schmitt at or call 503-242-0900.

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Cascade in the Capitol: Testimony in favor of deregulating the natural hair care industry

The Oregonian published a great article about this hearing, pointing out Cascade’s long-held position against what the reporter labels government overregulation. She links to the Cascade QuickPoint I provided the committee yesterday.

Unlikely alliance presses Legislature to ease regulations on natural hair care
The Oregonian, March 27, 2013

Audio of the hearing is here. This bill, HB 3409, is heard in the first 36 minutes, with my testimony (in writing below) beginning at 33 minutes into the hearing.

March 26, 2013

Testimony before the House Committee on
Consumer Protection and Government Efficiency
in Favor of Deregulating the Natural Hair Care Industry
 by Steve Buckstein

Good afternoon, Chair Holvey and members of the Committee. I’m Steve Buckstein, Senior Policy Analyst and founder of Cascade Policy Institute, which is a non-profit, non-partisan think tank based in Portland.

I support HB 3409.

I submitted a short commentary one of our summer interns wrote last year after the public found out that Oregon makes it practically impossible for natural hair braiders to practice their trade in the state.

Eleven states already exempt braiders from cosmetology licensing, including our neighbors to the north and the south. Of course, in Washington state it took a lawsuit filed by the libertarian public interest law firm Institute for Justice to free hair braiders from the licensing regime.* I hope that won’t be needed in Oregon.

The law is silent on this issue in 22 other states.

Oregon is one of just seven states that impose licensing requirements on this profession, which include from 1,000 to 2,100 hours of classes.**

Reasonable people can disagree about which professions might require some form of state licensing, but in America the right to earn an honest living should take precedence over the need for the state to regulate everything in sight.*** It should also take precedence over an industry’s desire to keep upstarts out of the market.

Finally, I believe that your committee is in the business of Consumer Protection, not Industry Protection. By allowing hair braiders to earn an honest living, you’ll be doing them and their potential customers a real service.

Thank you.

* In my oral testimony I incorrectly stated that the Washington lawsuit was successful, but according to this article the Department of Licensing clarified the regulations to exempt hair braiding after the lawsuit was filed: Licensed to Work: We should not require state permission to, for example, braid hair, Alan During, Siteline Daily,  October 14, 2011.

**  A Dream Deferred, Valerie Bayham, Institute for Justice, 2005.

***  The Right to Earn a Living: Economic Freedom and the Law, Tim Sandefur, Cato Institute, 2010.

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Legislative Leadership Forum Series 2013

Couldn’t make it to our Legislative Leadership Forum Series in Salem? Watch the video recaps here!

Columbia River Crossing Legislative Leadership Forum

Cascade President and CEO John A. Charles, Jr. was joined by the founding Publisher and Editor of Willamette Week, Ron Buel, for a discussion of the I-5 Interstate Bridge Replacement project and its proposed funding mechanism, HB 2800.

Ron Buel wrote a book on transportation published by Prentice-Hall and wrote extensively on transportation as a staff reporter and bureau chief for The Wall Street Journal.  Ron was the founding Editor and Publisher of Willamette Week and spent 13 years at Nike, where he was Director of Business and Strategic Planning.


Reclaiming the Moral High Ground: Ending the Legislative Addiction to Booze, Drugs, and Gambling Legislative Leadership Forum

John Charles led a discussion on how much money the Oregon legislature brings in from sin taxes and the lottery, where it goes, the moral hazard problem, and how to fix it.


Oregon’s 3% Public Purpose Charge on Ratepayers: The Tax that Refuses to Die Legislative Leadership Forum

John Charles will lead a conversation on Oregon’s 3% public purpose surcharge. In 1999 the legislature authorized a 10-year tax of 3% on the ratepayers of Oregon’s investor-owned electric utilities, to begin in 2002. It should have expired last year. Yet, it has been extended to 2026, and the 3% has increased to 6% for some customers. This presentation included how this happened, where the money goes, and what the legislature should do about it.

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Teen Entrepreneurs Week Instills Business Knowledge and Personal Confidence

Your average high school students may not be able to explain a fictional company’s dividends to a lecture hall full of adults from the business world. But after five days at Young Entrepreneurs Business Week, they could. YEBW is a nonprofit summer camp founded in 2006 by young Oregon entrepreneurs Nick and Maurissa Fisher, hosted on the campuses of Oregon State University and (new for 2013) the University of Portland.

YEBW’s founders shared a concern that young people of all educational and economic backgrounds often leave high school with no practical business knowledge, hindering their ability to innovate, create, and produce the kinds of goods and services key to Oregon communities’ growth and success. They sought to fill the gap by drawing together curriculum developers, business professionals, educators, and successful youth-focused program leaders to launch an innovative educational program for high school students.

YEBW students leave the camp possessing relevant, basic financial and business skills to apply to whatever goals they set for themselves. The camp starts with the basics so teenagers progress gradually, under the guidance of adult mentors, to create fictional companies, to pitch business plans to mock investors, and even to present earnings reports to their “stockholders.”

Participants spend one week on the OSU or UP campus and are exposed to a challenging curriculum designed to teach students that business can be fun and exciting, not to mention understandable and interesting. During the program, students are divided into student-led companies, guided by volunteers from the business community who share their knowledge and expertise throughout the week. The curriculum provides students with the financial literacy, business fundamentals, and confidence they need to be self-sufficient and successful.

During the first-year program, Business Week, students form mock companies where they create management teams, develop mission statements, invent a product, and conduct actual operation of their own business by competing in business simulations. Designed to broaden the practical skill sets of each student, the program incorporates professional speakers and other interactive learning exercises like mock interviews and networking events.

For returning students, Investing Week gives students the opportunity to learn about basic investment vehicles, the principles of evaluating a potential investment, and understanding the personal and business effects of the financial market system. Apprentice Week provides the chance to learn what it is like to start and run a business. Students prepare a full business plan, run an on-campus business as a team, and present their individual work to a panel of judges acting as potential company “investors.”

It’s not all “head knowledge,” either. YEBW fosters professional interpersonal skills. Students learn the art of the handshake, eye contact, introductions, proper business and evening attire, and table manners, so they can navigate job interviews and networking events with confidence. A high point of the week, increasingly popular with the students, is the “etiquette dinner,” where they practice their skills by networking and dining with adult volunteer professionals at a formal banquet.

YEBW’s motto is “there is a business side to every occupation.” Likewise, every occupation would benefit from Oregon having more business-savvy graduates of YEBW. The teens who attend the first-year program mostly come with no prior business knowledge or experience, but they leave with well-earned confidence in their abilities and potential as tomorrow’s successful professional adults. A nonprofit program like YEBW, spearheaded by enthusiastic young business leaders, is truly a bright light for the future of the entrepreneurial spirit in Oregon.

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

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An Alternative Analysis of Measure Five’s Impact on State and Local Government

Cascade’s first major research report after its founding in 1991 dealt with the property tax relief measure passed by Oregon voters in 1990. Published in 1992 before the World Wide Web was widely available, it asked the question, “Does Oregon have a tax problem, or a spending problem?”

It is posted online now for the first time:

Focus on Measure 5
An Alternative Analysis of Measure Five’s 
Impact on State and Local Government

By Vernon S. White

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Protecting Public Safety and Reducing Correctional Costs in Oregon

Can Oregon’s criminal justice system fight crime, prioritize victims and protect taxpayers all at the same time?  The policy director and a policy analyst for the national conservative group Right on Crime say that it can in this new Cascade paper.

Click here to read the report.

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Don’t End Tax Increase Warnings

In the late 1990s Oregon voters approved measures that require envelopes containing certain property tax measures to be boldly stamped in red with this warning: CONTAINS VOTE ON PROPOSED TAX INCREASE.

Now, public employee unions are asking the legislature to end this practice on the grounds that the ballots themselves contain clear information about proposed tax hikes. What the unions don’t say is that without these bold warnings, many potential voters won’t even open the envelopes to discover what’s in store for them if the measures pass. Unopened envelopes mean fewer potential No votes, which is just what the unions want.

Another argument against the warnings is that they unfairly apply to some tax measures, but aren’t required for others. That’s true. But, rather than end the current warnings, we should print them on envelopes that contain tax increase votes of any kind. The unions won’t like this, but many taxpayers will.

The legislation aimed at killing the warnings is House Bill 3113. It has already had one public hearing that generated little public opposition. Unless more people stand up and oppose it, the bill may become law.

That would end what Jason Williams of the Taxpayer Association of Oregon calls the “common courtesy that we’re about to knock the daylights out of you with a tax increase.”

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Tobacco Cessation or Just Increasing General Fund Revenue?

The Oregon legislature is once again trying to raise the cigarette tax, this time by $1.00 per pack. According to the sponsors of the bill―Representative Mitch Greenlick and Senator Elizabeth Steiner Hayward, both of west Portland―the primary purpose of HB 2275 is to reduce tobacco consumption, not raise revenue for the state.

But the bill itself tells another story. It states in Section 6 that “All moneys from the taxes imposed by this Act shall be credited to the General Fund.” Where is the specific assistance for smokers trying to quit smoking? It’s not there. Under current law, the state’s Tobacco Use Reduction account receives only 2.9% of all current cigarette tax revenue, and HB 2275 does not increase that.

Moreover, since 1999 the state has received more than $1 billion from smokers through the so-called “Master Settlement Agreement” with the four largest tobacco companies. That money was supposed to pay for the “costs of smoking” imposed on society. Yet, most of those funds were spent on other programs that had little to do with public health, and none of it went to tobacco cessation programs.

Smokers are routinely picked on by legislators because they are a vulnerable minority, but they are already paying more than their fair share of taxes. If reducing tobacco use is really the goal, it’s time for politicians to try another approach.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Killed by Cost Cutting

By Sally C. Pipes

British officials confirmed in January that as many as 1,200 people died needlessly at a government-run hospital in Stafford, a city in western England.


According to the government’s official report, Britain’s National Health Service was so fixated on “protecting ministers from political criticism” that it resorted to denying patients critical care as “nurses and doctors were put under pressure by managers to ensure official [cost-cutting] targets were achieved, even when that meant patients were put at risk―leading to the deaths.”


Think these kinds of health care horror stories can’t happen here in the United States? Think again. Several aspects of the Affordable Care Act bear a striking resemblance to the very National Health Service programs that have rationed health care―and led to so many unnecessary deaths.


In Britain, a government agency, the National Institute for Health and Clinical Excellence (NICE), conducts “comparative-effectiveness” research, which attempts to determine the relative effectiveness of treatments for particular conditions by pitting them against one another.


This research is not unbiased. It can only generate results for the average patient, and thus ignores the reality that different treatments may have different effects upon different people. NICE also routinely uses cost as a factor when deciding whether a treatment is effective. So it’s constantly making judgments about whether a particular therapy is worth the extra expense―even if it works better than an alternative. This past December, for instance, NICE declined to pay for a proven ovarian-cancer drug it deemed too expensive.


And if a drug can clear NICE, there’s no guarantee that patients will have access to it. A recent report by Britain’s Health and Social Care Information Center found that basic treatments for everything from arthritis to cancer were routinely denied―even after they were approved by NICE.


It appears that the British system’s primary concern is cutting costs―patient welfare be damned.

This barbaric system has some high-profile admirers, including some of ObamaCare’s champions. For instance, Donald Berwick, administrator of the Centers for Medicare and Medicaid Services during President Obama’s first term, has supported bringing NICE’s rationing to the United States, saying, “NICE is extremely effective and conscientious.”


ObamaCare puts in place many of the building blocks of the British health care system. For instance, the United States is about to institute its own version of NICE: the federally chartered Patient-Centered Outcomes Research Institute (PCORI).


PCORI will underwrite government-sponsored comparative-effectiveness research. The agency’s supporters claim that it will simply provide doctors with information about which treatments work best.


Indeed, PCORI says that it “will ensure that its research is construed as mandates for practice guidelines or coverage recommendations.” The health care economist Jason Shafrin has described PCORI as “like the UK’s NICE but without any teeth.”


But if PCORI seems toothless now, that will quickly change as costs increase. ObamaCare explicitly states that these supposed limits should “not be construed as preventing the Secretary from using evidence or findings from such comparative clinical effectiveness research in determining coverage, reimbursement or incentive program.”


Once PCORI starts issuing recommendations―and the agency just recently handed out $40 million in tax money for CER―ObamaCare’s Independent Payment Advisory Board (IPAB) might well act on them.


IPAB is comprised of 15 unelected bureaucrats charged with reining in Medicare spending if it exceeds GDP growth plus 0.5 percent. IPAB’s recommendations automatically become law unless Congress comes up with equivalent spending reductions elsewhere. Even though the board is supposed to start work in late April, none of the 15 has been appointed yet.


Supporters of IPAB point out that the board is forbidden from reducing benefits or raising fees. But IPAB can create payment incentives that will determine the behavior of health care providers. In other words, IPAB may not be able to prohibit doctors from prescribing certain treatments, but it can ensure that they lose money when they do. That’s rationing by another name.


Fortunately, the House of Representatives recently approved a “rules package” stipulating that it won’t follow ObamaCare’s orders to expedite IPAB’s Medicare cuts through Congress. This is a good start for eventual repeal of the Affordable Care Act―undermining its most disastrous parts before they do any real damage. But unless Congress does more to stop ObamaCare, rationing―with all of its deadly consequences―is inevitable.


Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. Her latest book is The Pipes Plan: The Top Ten Ways to Dismantle and Replace ObamaCare.

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Supreme Court Should Reject Federal Regulation of Forest-Road Rainwater

By Daniel A. Himebaugh

Is rain in the woods the equivalent of hazardous waste? The answer might seem obvious, but the question is one that the U.S. Supreme Court will answer soon, in the case of Georgia-Pacific West v. Northwest Environmental Defense Center.

The environmental organization Northwest Environmental Defense Center sued Oregon state officials and several timber companies in 2006, seeking to require them to obtain federal Clean Water Act permits before using or authorizing the use of forest roads. NEDC won at the 9th U.S. Circuit Court of Appeals in 2011 by convincing the court that rainwater flowing through forest road ditches must be treated as industrial pollution that requires a federal permit.

In briefs with the Supreme Court, timber harvesters argue that requiring Clean Water Act permits for forest road runoff would do little to improve the environment, but would greatly harm logging in the United States.

Indeed, expanding federal Clean Water Act authority to cover forest road runoff makes no sense if the objective is to improve water quality. A new permitting regime would interfere with state programs that are already being enforced.

At last count, there were more than 150 state laws designed to prevent logging from becoming a major source of water pollution. According to a study made available by the U.S. Forest Service, such regulation is effective because it fosters flexibility, avoids impractical one-size-fits-all restrictions, and improves compliance.

Furthermore, federal permitting will create tremendous new costs. As the Supreme Court noted in 2006, the cost required at that time to obtain Clean Water Act “dredge and fill” permits was staggering―$271,596 for an individual permit. Similar costs would apply to as many as 5 million landowners if the court accepts the idea that forest road runoff requires a Clean Water Act permit. Big operations that can afford it will pay (and pass the cost on to consumers). Many small operations―which make up the majority of forest land owners―simply will not be able to pay.

Regulating forest road runoff under the Clean Water Act will also lead to intolerable delay. A few years ago, EPA was forced as a result of litigation to create a rainwater permitting program for shipping vessels. EPA needed over two years to get the program up and running, and that program has a much smaller scope than a program covering forest roads would have.

How long would it take the agency to develop a program for forest roads? Nobody knows, but one thing is certain: Any delay in developing a new program would harm timber harvesters, confronting them with a brutal choice. If they continued using forest roads, they would run the risk of becoming a defendant in a Clean Water Act lawsuit. But no longer using forest roads would mean abandoning their livelihoods.

The right path for the Supreme Court should be clear: The justices should consider the destructive effects of treating forest road runoff as industrial pollution under the Clean Water Act, and reject NEDC’s claims when they rule on Georgia-Pacific West v. NEDC.

Daniel A. Himebaugh is an attorney with Pacific Legal Foundation in Bellevue, Washington. He represented over a dozen timber industry, conservation, and educational organizations in filing a friend-of-the-court brief urging the U.S. Supreme Court to reverse the 9th Circuit’s decision in the Georgia-Pacific West case. Himebaugh is a guest contributor for Cascade Policy Institute, Oregon’s free market research center. A version of this article was originally published by The Capital Press, October 2012.

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Where’s the Secret Tax for the I-5 Bridge Proposal?

On Monday, the Oregon Senate passed House Bill 2800, the new Interstate 5 Bridge Replacement Proposal (otherwise known as the Columbia River Crossing), which now goes to Governor Kitzhaber for his signature. Despite its passage, the I-5 bridge plan is still seriously flawed.

Legislators have authorized $450 million in debt financing without telling Oregonians who will be taxed for the debt service. All they have said to date is that ODOT will have to pay between $27 and 35 million annually for interest payments on bonds. Since ODOT doesn’t have the money, there must be a future tax increase – just not voted on by the same people who voted for HB 2800 this session.

This “back-loaded” approach to paying for projects taxpayers can’t afford is cynical and dishonest. The I-5 Bridge Proposal passed because legislators didn’t have to admit they were raising taxes. If the plan had included a 4-cent-per-gallon tax increase or a doubling of the vehicle registration fee, the debate would have been completely different.

Legislators who voted for HB 2800 wanted the glory of passing a bill; but before they start pouring concrete, they should look us in the eye and tell us which tax they plan to raise. If they can’t give us an honest answer, they aren’t qualified to serve.

Kathryn Hickok is Publications Director at Cascade Policy Institute.

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Private Charity and Public Choice: How States’ Tax Credit Programs Give Voluntary Education Funding a Boost

Please join us for Cascade’s monthly Policy Picnic led by Children’s Scholarship Fund-Portland’s Director, Kathryn Hickok, on Wednesday, March 6, at noon.

Kathryn will be leading a discussion about states with tax credits (or voucher programs) and how those law-enabled options boost the private dollars being spent charitably on educational choice and help parents take advantage of other options. Choice bills make both scholarship donors’ and parents’ money go farther.  They incentivize investing in education while respecting market choice and the voluntary nature of giving and of parents’ choosing schools.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to ten guests on a first come, first served basis, so sign up early. To RSVP, email Patrick Schmitt at or call 503-242-0900.

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Wanted: More Life with Parents, Not Government Preschool

In his February 12 State of the Union address, President Obama called for another “universal” government program―universal preschool.

“…[N]one of it will matter unless we also equip our citizens with the skills and training to fill those jobs.

“And that has to start at the earliest possible age. You know, study after study shows that the sooner a child begins learning, the better he or she does down the road.

“But today, fewer than three in ten 4-year-olds are enrolled in a high-quality preschool program. Most middle-class parents can’t afford a few hundred bucks a week for private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives. So, tonight, I propose working with states to make high-quality preschool available to every single child in America.”

Never mind that the federal budget today cannot possibly pay for universal preschool, or that it’s not the role of government to provide glorified daycare for every American child.

The truth is, the government has been trying to close the “preschool gap” for more than forty years, with almost nothing to show for it. For years, the Head Start program, begun by President Johnson in 1965, has been known to be a failure by both academic and social development standards.

According to Elise Hilton of the Acton Institute, “[e]ven the government knows this is true. The Department of Health and Human Services has admitted ‘by third grade, the $8 billion Head Start program had little to no impact on cognitive, social-emotional, health, or parenting practices of participants. On a few measures, access to Head Start had harmful effects on children.’”

Let’s not go farther down that road. We don’t need every American child spending more time in classrooms, younger and younger. We need an economy that empowers parents both to support their families and to spend time with their toddlers, letting them experience the wonders of the real world. More kids need to be able to explore life with Mom and Dad. Then more of them will come to grade school ready to learn.

Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.

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Cascade in the Capitol: Testimony on benefits of the Earned Income Tax Credit and harm done by the minimum wage

Testimony before the Senate Committee on Finance and Revenue
Regarding SB 326 and SB 507
by Steve Buckstein

Good afternoon, Chair Burdick and members of the Committee. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-profit, non-partisan public policy research center based in Portland.

Cascade is supportive of any legislation that allows people to keep more of their own income, as these bills do. When the tax burden is diminished or eliminated, people are incentivized to work harder. This benefits both individual workers as well as the broader community.

However, if your goal is to help raise people out of poverty and lower unemployment, you should be aware that the Earned Income Tax Credit (EITC) works at cross-purposes with the state’s high minimum wage law, which punishes employers for trying to offer jobs to entry-level workers.

The contrast between the two approaches was quantified in a study published last year by economists Joseph Sabia and Robert Nielsen, which found a 1% reduction in state poverty rates associated with each 1% increase in a state’s EITC. Yet, a 2007 study by Mr. Sabia found that single mothers were made worse off by increases in the minimum wage: Their employment dropped by 6% for each 10% hike in the minimum wage.

I understand that you will consider SB 326 and SB 507 as stand-alone measures, while Oregon voters have said that they want a high minimum wage. But the two approaches are in conflict, and the committee would do well to address the punitive effects of minimum wage laws in the future.

Thank you.

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