labor lawAdivision of labor law center

On January 1, 2009 the Oregon minimum wage will increase from $7.95 to $8.40 per hour. The increase of 45 cents is the largest in recent memory, spurred by high inflation in the past year.

 

State Labor Commissioner Brad Avakian announced the new rate on September 16, 2008.

 

The increase is based on the 5.37% increase in the cost of living between August 2007 and August 2008. The change is based inflation measured by the Consumer Price Index. Each year, the Oregon Bureau of Labor and Industries or BOLI adjusts the minimum wage for inflation, rounding to the nearest five cents.

 

Under Ballot Measure 25, passed by the voters of Oregon in 2002, the state minimum wage is adjusted annual to reflect inflation. While many question the wisdom of increasing the minimum wage during a recession, it is the law.

 

Oregon is among some 13 U.S. states where the minimum wage is adjusted for inflation each year. Other states include Washington Vermont, Nevada, Montana, Missouri, Florida, Colorado, and Arizona,

 

 “This increase is the direct result of the rapidly rising cost of living facing Oregon workers,” Labor Commissioner Brad Avakian said. “By helping workers and their families preserve their purchasing power in difficult times, our strong minimum wage law also benefits our local economies, where workers spend most of their paychecks.”

 

Minimum wage workers represent about 7.5% of Oregon’s workforce and 143,000 individuals struggle to support themselves and their families on these wages, according to the Oregon Employment Department data for the last quarter of 2007 – the most recent figures available. Those numbers include food servers and other tipped employees, since Oregon is one of a handful of states that doesn’t allow employers to take a tip credit.

 

The CPI, which is published by the United States Bureau of Labor Statistics, is a measure of the average change in prices over time in a fixed “market basket” of goods and services, such as food, shelter, medical care, transportation fares and other goods and services people purchase for day-to-day living.

 

Washington, which already has a higher rate, will continue to have the highest state minimum wage in the nation, while Oregon’s is likely to be second highest.

 

State Rep. Diane Rosenbaum (D-Portland), who was the Chief Petitioner for Ballot Measure 25, said “Thousands of Oregon families are struggling to escape poverty while working full-time at minimum wage jobs.” Rosenbaum adds, “this increase helps low-wage workers put food on the table and a roof over their heads.”

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