Minimum wage increase affects thousands of student jobs at UO, OSU

Oregon's minimum wage increase kicks in July 1, 2016.

EUGENE, Ore. - Oregon lawmakers passed a new minimum wage law this law, which kicks in this summer.

RELATED | Governor signs minimum wage increase into law

And as that wage continues to increase over the next few years, local universities are going to have to shell out millions of dollars more to pay their student employees - or reduce the number of hours or jobs available.

For both the University of Oregon and Oregon State, the question is: Where will the money to pay for these student jobs come from?

In the next fiscal biennium from 2017 to 2019, the state's minium wage law could cost the University of Oregon an extra $2 million; at Oregon State University, the outlook calls for a $4 million increase.

"It's one of a lot cost drivers we're currently dealing with," said Tobin Klinger at the University of Oregon. "For example, we're looking at IT infrastructure, we're looking at additional investments there. We also have contract obligations with our faculty union."

The UO board of trustees recently voted to increase tuition.

But Klinger said that even with the added funds, the increase in the minimum wage comes down to individual department budgets.

"Instead of being a layoff situation, it's more of a determination of how many students would a particular department be able to employ this year versus next year," he said. "If they have fewer slots, they would hire fewer students."

Some jobs could be eliminated, or hours could be cut back.

An Oregon State representative said the University currently has nearly 4,200 student workers earning the minimum wage on campus.

"We want students to engage in internships on campus, we don't want to keep students from earning a wage that helps them pay for their tuition or room and board," said OSU spokesman Steve Clark, adding that students who hold internships tend to have higher rates of academic success.

As the minimum wage continues to gradually increase over the next five years, so will the universities labor expenses.

"The good thing about the legislation is that it occurs over time," Clark said. "It's a 50 cent increase now, and it increases in steps, so that gives us time to work with the legislature."

Spokespeople for both universities said that if state funds or additional grants can help fund other higher education costs, then perhaps there is more room in the budgets to absorb the increased wages for student jobs.

Neither university knows many jobs could be cut or have hours reduced because staff are still working on budgets.

The 2017 fiscal year starts July 1, the same day the new minimum wage kicks in.

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