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New Year Rings in Pay Hike for Oregon Minimum Wage Earners

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Posted: Thursday, December 27, 2012 10:49 am

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 have been middle-wage occupations, low-wage occupations have accounted for 58 percent of jobs created in the post-recession recovery.

The Oregon Employment Department recently estimated that there were about 130,000 jobs in the state that paid less than $8.95 per hour in the first quarter of 2012 that would be directly affected by the increase. The Employment Department data shows that the leisure and hospitality industry and retail trade account for about four out of 10 of the jobs affected.

The wage increase affects tens of thousands of minimum wage workers and workers with wages just above minimum. The Washington, D.C.-based Economic Policy Institute (EPI) recently estimated that 83,000 Oregonians would benefit directly from the minimum wage increase. The institute noted that another 44,000 Oregon workers currently earning just above the new minimum wage 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). These families could fall further behind, and more will join them below poverty in early in 2013 when the federal government will likely raise the poverty guideline to account for inflation.

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.

As of January 1, Oregon will be one of 19 states plus the District of Columbia with a minimum wage above the federal minimum wage of $7.25 per hour, which is not scheduled to increase.

Oregon enacted the nation's first effective state minimum wage and hour law in 1913 through the work of Caroline Gleason, who later became Sister Miriam Theresa.

"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. The Center's goal is to improve decision-making and generate more opportunities for all Oregonians.

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