It’s high times for the region’s economy, at least according to the standard gauges. Despite a recent decline, Northwest stocks are up. Our region’s GDP is up too. But other measures, including Sightline’s economic security index, show average that northwesterners are no better off than a decade ago. Generous minimum wages in some places have helped, but support for minimum wage increases throughout the region is hampered by the notion that that they hurt employment. With our economy on the line, can we trust conventional wisdom?

For example, if we look beyond gross domestic product, regional economic security measures fail to show progress. Consider the picture of inflation-adjusted, median household income in the Northwest states. It shows us jumping off a building in 1998, and bouncing as we hit the ground in 2001.





Of course that booming economy “building” was only a couple of stories high—Sightline’s report Falling Behind showed that even in the thriving 1990s, the economy was backfiring for most ordinary folks. And current research indicates that while the EKG for GDP has been on an increasingly consistent incline since the 1980s, household income has been hitting more peaks and valleys, leaving families less secure.

Long-term unemployment is also on the rise in the US. Conventional theory might have you believe that raising minimum wages could be to blame. But on closer look, Sightline finds that the choice between keeping local jobs and a higher minimum wage is a false one.

Seven of the ten states that raised their minimum wage above the federal wage base between 1990 and 2004 out-performed the national unemployment rate in a three-year before-and-after average.

In 1990, for instance, Oregon boosted its wage 45 cents above the prevailing federal minimum. While Oregon’s unemployment rose by 1.1 points, the national rate rose faster, by 1.4 points, during the same period, a three-year before-and-after average. So Oregon managed to increase its minimum wage and still do a better job of maintaining employment than the country as a whole. A similar state-level increase in employment relative to the nation occurred when California, Connecticut, and Delaware raised their wages in 1999.

Raising the minimum wage has often paid off when national employment is improving as well. When Massachusetts raised its wage by 50 cents above the federal floor in 1996, its unemployment dropped 2.7 percent during the same period that federal unemployment declined by only 1 percent.

That’s good news for Washington and Oregon. These states both lifted the lowest hourly earnings by linking minimum wages to inflation. They now boast the highest wage floors in the US, a safety net for low-income, working families.

While most recent data shows unemployment in the region has dropped a bit, Sightline’s other economic security indicators show that from 2004 to 2005 there’s been only slight improvement in cutting the overall poverty rate, and child poverty rates are slightly up. In spite of improving indicators like stock prices and GDP, the Northwest has seen little progress in the past decade.

Achieving economic security in the region means recognizing the economic conditions of average northwesterners, and seeing clearly how solutions like minimum wage boosts affect the economy in a positive way. Read more about Sightline’s economic security index:

The recent trends in economic security
More on why we should use measures other than the GDP
Falling Behind: Sightline’s report on economic security during the 1990s boom.