Oregon 15-Cent Minimum Wage Increase Still Not Enough to Make Ends Meet

News Release
December 26, 2013 Download PDF

As calls for a higher minimum wage grow louder around the country, Oregon’s wage floor is quietly set to rise by 15 cents at the start of the new year. The increase will add $312 to the yearly income of a full-time minimum wage worker.

“While the uptick in Oregon’s minimum wage is welcome, it still leaves too many working families unable to meet basic needs,” said Jason Gettel, policy analyst with the Oregon Center for Public Policy. “An even higher wage floor would be good for workers and our state.”

The increase set to take effect on January 1 will put Oregon’s minimum wage at $9.10 per hour. The change is the result of a ballot measure, enacted by voters in 2002, requiring that the state’s minimum wage keep up with the cost of living.

The Oregon Center for Public Policy estimated that it would take at least a minimum wage of about $9.55 to lift a family of three with one parent working full-time out of poverty in 2014. This figure is based on the Center’s projection of how much the federal poverty guidelines are likely to increase next year.

“Despite the federal poverty level being a very low bar, the minimum wage is still sometimes not enough to lift a family above that level,” said Gettel. “The official definition of poverty really measures serious economic privation, not basic needs.”

To achieve a secure, yet modest, living standard, families in Oregon need income that is at least two-and-a-half times the federal poverty level, according to analysis by the Economic Policy Institute, a Washington, D.C.-based think tank. That would mean a wage of about $24 per hour for a single parent with two children.

Over the past year, fast food workers in cities across the country have held one-day strikes in an effort to pressure the industry to raise wages to at least $15 an hour. These strikes have boosted efforts to raise the minimum wage.

A $15 minimum wage may soon become a reality for some workers in SeaTac, Washington. In November voters in the city approved a ballot measure raising the minimum wage for hospitality and transportation workers to $15 an hour. Opponents, however, have sued to strike down the law.

In nearby Seattle, the incoming mayor has convened a task force to study raising the city’s minimum wage up to $15 an hour.

Without specifying a figure, Washington Governor Jay Inslee has called for a discussion on raising the state’s minimum wage — already the nation’s highest among all states. It is set to increase to $9.32 an hour in 2014.

Just last week, the city council of Washington, D.C. unanimously approved an increase in the city’s minimum wage to $11.50, starting in 2016. After that, minimum wage workers will receive yearly cost of living increases.

The minimum wage is also going up in California. Earlier in the year lawmakers enacted a bill raising the minimum wage to $10 an hour by 2016, getting there in two steps.

Oregon’s minimum wage isn’t likely to surpass the $10-mark until at least 2018, Gettel noted. “Unless inflation rises more rapidly than expected, it will be about five years before we hit $10 per hour.”

“In 2002, Oregon voters rightly bumped up the state’s minimum wage and made sure that it wasn’t eroded by inflation,” said Gettel. “Now another increase to the minimum wage would help many more working families make ends meet.”

As workers across the country call for a higher wage floor, research shows that modest increases in the minimum wage do not dampen job creation, the main concern voiced by opponents of an increase.

“The weight of . . . evidence points to little or no employment response to modest increases in the minimum wage,” concluded a report released earlier this year by the Center for Economic and Policy Research, a Washington, D.C. think tank. Their report reviewed two decades of research on the impact of minimum wage increases on employment.

“The time may be right for state and local officials in Oregon to consider raising the minimum wage,” said Gettel. “A higher wage floor is an effective anti-poverty strategy, and it can be implemented without affecting the job market.”

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.

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