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Overdue for Big Raise, Oregon Minimum Wage Workers Get None in 2016

News Release
September 16, 2015 Download PDF

Oregon’s minimum wage would top $19 per hour if it had kept pace with the rise in worker productivity since 1968 — more than twice what the minimum wage will be in 2016. State Labor Commissioner Brad Avakian announced today that the minimum wage will stay put at $9.25 per hour in 2016.

“Oregon’s lowest-paid workers are long overdue for a big raise that helps the minimum wage catch up with the growth in worker productivity,” said Tyler Mac Innis, policy analyst with the Oregon Center for Public Policy. “Lawmakers or voters need to act so that so that our lowest-paid workers can begin to share more of the economic gains they have helped produce.”

This morning’s announcement that Oregon’s minimum hourly wage will remain unchanged follows the federal government’s release earlier in the day of the official numbers on inflation. By law, Oregon’s minimum wage tracks inflation, as measured by the August Consumer Price Index. It came in today virtually unchanged from the prior year.

“Keeping up with inflation is necessary but not sufficient,” Mac Innis said.

When productivity rises, it means that workers are producing more goods and services in the same amount of time. Economists note that growing productivity creates the potential for rising living standards.

In the decades following World War II, the minimum wage kept pace with rising productivity. That period saw the rise of a broad middle class.

In 1968, the federal minimum wage — which at that time set Oregon’s wage floor — reached its all-time high, when adjusted for inflation.

Since 1968, worker productivity has been on a steady upward climb, while the minimum wage has declined when adjusted for inflation.

“The huge gap between the minimum wage and productivity shows that there is plenty of room in the economy to give a significant raise to the state’s lowest-paid workers,” Mac Innis said. “Right now the minimum wage is too low for families to make ends meet.”

In 2016, a minimum wage worker in Oregon laboring full time (40 hours per week) the whole year will earn $19,240.

“That’s not enough for a single adult to make ends meet, let alone a parent raising a child,” said Mac Innis.

The public policy institute recently published on its website a calculator that estimates how much income families across Oregon need to have a basic level of economic security. Those estimates show, for example, that in 2014 a single parent raising one child in rural Oregon needed about $44,751 to cover the basic necessities.

In recent years, low-income working families have lost out while the economy has been on an upswing. From the end of the Great Recession in 2009 to 2014, low-wage workers — the bottom fifth of wage earners in Oregon — saw their wages decline by more than 5 percent. Over the same period, worker productivity nationally increased by more than 5 percent, Mac Innis said.

“For far too long the productivity gains that workers help create have done little to lift workers at the bottom, as the benefits have mainly flowed to those at the top,” said Mac Innis. “It’s time to make the economy work for all Oregon workers.”

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.