About 128,000 Oregon workers are due for a raise, following today’s announcement that Oregon’s hourly minimum wage will go up 15 cents in 2013.
“A rise in the minimum wage is good news for workers and Oregon’s economy,” said Jason Gettel, policy analyst with the Oregon Center for Public Policy. “It helps the lowest-paid workers make ends meet, and helps the Oregon economy when the workers spend those extra dollars in local businesses.”
Oregon’s minimum wage will rise from $8.80 to $8.95 on January 1 of next year, the Oregon Bureau of Labor and Industries (BOLI) announced today. The adjustment, mandated by a ballot measure approved by voters in 2002, reflects the increase in the cost of living as defined by the August Consumer Price Index (CPI), which increased 1.7 percent from a year ago.
OCPP calculated that the increase means an additional $312 a year for a family with one full-time minimum wage worker.
According to OCPP, about 128,000 Oregon jobs — about 1 out of every 13 jobs in the state — will pay more due to the minimum wage increase set to take effect next year. That estimate comes from Oregon Employment Department analysis of Unemployment Insurance wage records showing the number of jobs paying less than $8.95 in the first quarter of 2012, the most recent data available.
The 128,000 estimate is probably low because jobs paying just above the minimum wage may also have wage increases, as employers adjust their overall pay structures to reflect the new minimum wage, Gettel said.
Unfortunately, Oregon’s minimum wage falls short of preventing poverty among some working families, Gettel said. At $8.95 an hour, an Oregon full-time minimum wage worker will earn $18,616 next year — an amount below the 2012 federal poverty guideline for a family of three ($19,090). These families could fall further behind in early in 2013, when the federal government will likely raise the poverty guideline to account for inflation.
Still, Oregon minimum-wage workers come out ahead of workers in all but one other state. Oregon’s current minimum wage trails only that of Washington state, currently set at $9.04. Because Oregon’s northern neighbor also annually pegs its minimum wage to inflation, Gettel expects Washington to announce a minimum wage increase later this year.
Oregon is one of 18 states plus the District of Columbia with a minimum wage above the federal minimum wage of $7.25 per hour, which is not scheduled to increase.
Next year, when the 15-cent Oregon minimum wage increase takes effect, full-time minimum wage workers in Oregon will earn $3,536 more per year than that their counterparts in those states where the federal minimum wage sets the floor.
Oregon enacted the nation’s first effective state minimum wage and hour law in 1913 through the work of Caroline Gleason, who later became Sister Miriam Theresa.
“Oregon was and continues to be a model for the nation when it comes to the minimum wage,” said Gettel. “Oregonians were smart to raise the minimum wage and keep it from being eroded by inflation.”
The Oregon Center for Public Policy is a non-partisan, non-profit institute that does in-depth research and analysis on budget, tax and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.