PORTLAND — In his State of the Union address in February, President Barack Obama called on Congress to raise the federal minimum wage to $9. On Tuesday, Oregon announced plans to exceed that, setting a minimum wage of $9.15.
It’s part of a scheduled increase tied to the U.S. Department of Labor’s Consumer Price Index. It takes effect in January. The change is expected to keep Oregon as the state with the nation’s second-highest minimum wage, trailing only Washington state.
Oregon’s minimum wage will be 15 cents higher in 2014 after also climbing 15 cents from 2012 to this year for approximately 98,000 workers.
Advocates for Oregon’s increase and its tie to the price index praised the increase as a sign that the state supports its lowest-paid residents, while the association that represents employers of many minimum wage earners castigated it as a job-killer.
Restaurants “are going to be concerned over
the cost of doing business in Oregon,” said Oregon Restaurant and Lodging Association spokesman John Hamilton.
Hamilton said the minimum-wage increase, coupled with requirements to provide health care and label menus, will create a difficult situation for small businesses, including restaurants.
“Raising wages, with other things going on including higher beef costs, will make it harder than it already is,” Hamilton said.
The left-leaning Oregon Center for Public Policy was decidedly more sunny on the wage increase’s prospects.
“We think it’s very good that Oregon voters decided to (increase) the minimum wage so the lowest-paid Oregonians don’t get left behind,” said OCPP spokesman Juan Carlos Ordonez.
Labor commissioner Brad Avakian, a former Democratic candidate for a congressional seat, said Tuesday that the minimum-wage increase will put money back into state businesses.
The estimated 98,000 workers earning minimum wage work about 30 hours per week, Avakian said. The raise pencils out to about an additional $4.50 per week, or $234 per year.
That’s nearly $23 million in pretax earnings, “virtually every dime” of which will be circulated back into Oregon, Avakian said.
In the midst of a statewide recession in 2002, Oregon voters passed Ballot Measure 22, which increased the state’s minimum wage to $6.90 per hour and tied it to increases in the consumer price index. Oregon uses the August-to-August yearly price measurement and releases its projected change in September each year.
The consumer price index looks at about 200 categories of products divided into eight groups, including food, housing, and transportation.
Avakian called it “a very smart thing.”
“It’s our way of making sure that Oregon’s lowest wage earners never fall behind,” he said.