ORLA Advocacy Key Issue

Protecting Small Businesses and Oregon’s Economic Future

One of the biggest threats to independent businesses in Oregon, and across the nation, is the desire by local government jurisdictions to control private employer-employee relationships.

This type of local involvement causes problems in two ways. First, multiple location businesses often establish benefits packages based on requests from their employees, which helps to limit turnover and improve employee satisfaction. When local governments set different standards based on jurisdiction, it changes how employees are treated, even though they do the same job for the exact same company.

Second, it puts small businesses at a disadvantage over larger businesses. Once again, when offering benefits to employees, the employer tries to select options that are preferred by workers in order to attract the best people, keep them happy, and therefore limit turnover.

When a local government forces a new benefit on all employers, larger operators are more likely to be able to absorb the costs. They generally are working with a higher profit margin to be able to cut employee hours to offset the benefit mandate. Smaller-sized businesses often have a more difficult time adjusting, and consequently are more apt to close their doors.

Local Mandates Can Hinder Economic Growth
As a state, Oregon relies heavily on income tax revenue – including from small businesses. While Oregon does its best to promote business development, local government entities are finding ways to inhibit growth. While employees need to be protected, it’s the state legislature that should address the issue of benefits in an open and mindful way. Local labor ordinances do not improve local coffers, but they certainly can hurt state revenues as businesses become less profitable and are unable to grow.

Unemployment Rates Also Factor In
Oregon continues to lag behind the nation in employment numbers. While our unemployment percentage has dropped, it is still higher than average. The unemployment rate for minors is even higher yet, and studies show that the earlier people enter the workforce, the greater their earning potential is as they get older. Historically, the hospitality industry has been a place of first employment for many young people, and that’s why it is imperative that we advocate for a strong job market. Ever changing employment law at the local level will only continue to hamper job growth.

Enact a Preemption to Decide Business Labor Practices on a Statewide Basis
Preempting local governments from getting involved in business labor practices will not cost them money. It can, however, stabilize the business environment in Oregon and allow companies to grow, which in turn will increase state tax revenue. The simple rule of supply and demand explains how lower unemployment rates increase a worker’s value, and drives wages up. Additionally, small businesses that hire minors under the age of 18 help to elevate average family incomes over time. This practice, in addition to strengthening policies that increase job growth, will greatly benefit family wages and state tax funds.

Oregon’s economy and employment figures can significantly improve with small business stability. Local government preemption for the purpose of economic growth is a benefit for the future of all Oregonians.