Oregon’s low-paid workers will get a raise starting in the new year, when a 15-cent increase to the state’s minimum wage takes effect.
The increase from $8.80 to $8.95 per hour means an extra $312 a year for a family with one full-time minimum wage worker. The increase is the result of Measure 25, approved by voters in 2002, which pegged Oregon’s minimum wage to rises in the cost of living.
“Strengthening the buying power of low-wage workers is especially critical in this economic climate,” said Chuck Sheketoff, executive director of the Oregon Center for Public Policy.
He noted that a recent study by the National Employment Law Project showed that, while 60 percent of jobs lost during the recession were middle-wage ones, low-wage jobs have accounted for 58 percent of jobs created in the post-recession recovery.
The Oregon Employment Department recently estimated that there are about 130,000 jobs in the state that pay less than $8.95 per hour, and 40% of them are in two low-paying areas. Retail trade and leisure and hospitality.
The wage increase will also affect workers earning just above minimum wage. The Washington, D.C.-based Economic Policy Institute (EPI) recently estimated that about 44,000 Oregon workers in that category would likely see their paychecks increase as employers adjust their overall pay structures to reflect the new minimum wage.
Together, those directly and indirectly impacted account for about 8.3 percent of Oregon’s workforce.
EPI found that about 86 percent of workers directly impacted in Oregon are over 20 years old, and three out of five are women.
“Odds are that a minimum wage worker is an adult and a woman,” said Sheketoff. “The image that some may have of minimum-wage workers being primarily teenagers is incorrect.”
Oregon’s minimum wage “unfortunately falls short of preventing poverty among some working families,” Sheketoff 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).
Still, Oregon minimum-wage workers will enjoy the second highest state minimum wage in the nation. Only the state of Washington will have a higher state minimum wage. Oregon’s northern neighbor, which also automatically increases its minimum wage according to the cost of living, will see its minimum hourly wage rise to $9.19 on January 1.
“Oregon was and continues to be a model for the nation when it comes to the minimum wage,” said Sheketoff. “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.