Oregon Labor and Industries Commissioner Brad Avakian Tuesday announced that Oregon’s minimum wage will increase to $9.10 on January 1, 2014, providing a .15 per hour raise for 98,000 minimum wage workers.
“Oregon can build a stronger economy by making sure that workers have the purchasing power they need to keep pace with the rising cost of everyday goods,” said Commissioner Avakian. “With this increase in Oregon’s wage floor, nearly 100,000 Oregonians will earn more money for groceries, school supplies, gas and other household essentials. That’s good not just for individual workers, but for our state’s economy.”
The adjustment will mean that directly-affected employees working 30 hours a week will have $234 more to spend on goods in 2014. The increase is expected to generate more than $20 million in new consumer spending for Oregon’s economy.
However businesses raise concerns about the higher cost including comments from the Salem Register-Guard: Restaurants “are going to be concerned over the cost of doing business in Oregon,” said Oregon Restaurant and Lodging Association spokesperson John Hamilton. “Raising wages, with other things going on including higher beef costs, will make it harder than it already is.
”Inc. magazine reports: It’s a contentious issue which divides small business owners and advocates–not to mention economists. The data is mixed. For every report that proclaims the negative impacts of a proposed minimum wage increase, another exists showing its benefits. While business owners may, understandably, have a knee-jerk reaction against having to pay more for labor, some who take a longer view may see benefits for their businesses.
“It increases the cost of running a business and employment costs and the costs for each new hire, and business owners will need more revenue and sales, and it might limit their abilty to create jobs,” Holly Wade, a senior policy analyst for NFIB, says.
A 2002 ballot measure supported by a coalition of senior, labor and religious leaders – and sponsored by Senate Majority Leader Diane Rosenbaum – directs the Oregon Bureau of Labor and Industries to adjust the state’s minimum wage annually based on inflation. Each year, Commissioner Avakian calculates the adjustment by measuring the increase to the Consumer Price Index (CPI), a figure published by the United States Bureau of Labor Statistics to track prices for a fixed “market basket” of goods.
Earlier this year, Commissioner Avakian testified before the U.S. Senate’s Health, Education, Labor and Pensions (HELP) Committee about Oregon’s successful experience indexing its minimum wage to provide businesses with a high level of predictability for payroll expenses over time, avoiding major spikes. A chart tracking minimum wage adjustments since 2002 is available upon request.
One common misconception about employees earning a minimum wage is that they are mostly teenagers. However, according to the Economic Policy Institute, roughly 80-percent of all affected minimum wage workers living in states with an indexed minimum wage last year were at least 20 years old.
“A strong minimum wage can help address growing income inequality while supporting local businesses that rely on strong consumer demand,” said Commissioner Avakian. “Oregon’s successful experience with an indexed minimum wage should serve as a model for others looking to support their workforce and provide businesses with stable, predictable wage adjustments over time.”
Minimum Wage Comparisons
List shows the current minimum wage in Oregon and neighboring states, and confirmed or expected changes. The federal minimum wage is also listed.
Oregon $8.95 (2013); $9.10 on Jan. 1
Washington $9.19 (2013); to be adjusted on Jan. 1
California $8 (2008); $9 by mid-2014; $10 by mid-2016*
Nevada $7.25/8.25 (2009)**
Idaho $7.25 (2009); Tied to federal rate
Federal $7.25 (2009); Increases proposed***
*Pending governor’s signature; Legislature approved last week
**Higher wage applies if employer does not provide health insurance
***President Barack Obama has proposed $9, Democrats $10.10, but Republican-controlled House unlikely to approve either
SOURCES: U.S. Department of Labor; Stateline via USA Today
