John Russell's take on fair wages for a hard day's work

The Oregonian
February 3, 2015By Steve Duin, Columnist

Portland developer John Russell has one perspective on income inequality and the cheap labor at the bottom of the scrum.

West Linn businessman David Emami has quite another.

And I'm wondering if Oregon's approach to poverty, hunger and the minimum wage is still based on the fond hope that the John Russells outnumber the David Emamis.

Russell is the president of Russell Development. He operates out of the black box that is the 200 Market Building. Ten years ago, he made a decision about the building's janitorial staff and security officers:

He would henceforth pay them an hourly wage that is $1 more than their union contract.

Top union scale for 200 Market janitors is currently $13.15 an hour. "John is paying $14.15," says Meg Niemi, president of Service Employes International Union Local 49.

Russell was inspired, he says, by Barbara Ehrenreich's 2001 book, "Nickel and Dimed." Ehrenreich spent two years laboring at nursing homes, greasy spoons and Walmart so she might experience first-hand the routine indignities of poverty.

Emami, a U.S. Labor Department investigation suggests, is not similarly moved by the plight of the poor.

In a December ruling, U.S. District Judge Marco Hernandez ordered Emami - who owns 16 office and retail properties in the Portland metro area - to pay 33 employees a total of $512,290 in unpaid overtime and remedial damages.

The Labor Department says it uncovered a "scheme" in which Emami avoided paying overtime to those employees -- most of whom earned between $8.50 and $8.80 an hour - by having them clock in on separate time cards.

Because Emami also violated the Fair Labor Standards Act by threatening employees who cooperated with the government, the court issued a temporary restraining order in 2013, preventing him from firing any employee involved in the investigation.

Class act.

Thanks to Emami, 33 employees weren't paid what they were owed. Thanks to Russell, approximately 20 janitors and security guards receive an extra $40 each week.

"There is a selfish benefit, to be honest," Russell says. "We have no turnover. At a buck an hour over union wages, our people have been with us for years."

But we're still only talking 20 employees. We're not talking about the change possible at the poverty line if the Oregon Legislature elects to raise the state's minimum wage.

That wage is now set at $9.25 an hour, 35 percent less than what Russell pays the janitors at 200 Market.

Raising the state's minimum wage will be a volatile issue in the 2015 legislative session. The state's Legislative Revenue Office added fuel to the fire when it recently published a report arguing that a $15.10 minimum wage would result - thanks to a corresponding drop-off in benefits - in a slim $49 boost in monthly income.

As Chuck Sheketoff at the Oregon Center for Public Policy notes, however, that conclusion only applies to a "hypothetical" family of three with child-care expenses of $1,200 each month.

"Their hypothetical family is not a typical minimum-wage worker," Sheketoff says. It's the rare family whose increase in income would be largely cancelled out by the increase in its Employment Related Day Care co-pay.

"That's not a minimum wage problem. That's a co-pay problem," Sheketoff says. "It's a rules problem."

Russell agrees. Too many Oregon families are in poverty. Raising wages is a worthy goal. "If the rules keep people from realizing the benefit of the increase, change the rules," he says.

And while state Treasurer Ted Wheeler says he is still assessing the damage wrought at the "benefits cliff," he believes this:

"Earning a living through work carries dignity. And I am sure most Oregonians would gladly leave government subsidies on the table if it means bringing home a better wage through an honest day's work."

While the Legislature mulls that over, you best hope you're being nickel and dimed by a John Russell, not a David Emami.

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