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Oregon and the minimum wage

Yellow:  Oregon $9.25 Dark Green: More than Oregon Green:  Higher than Fed but less than Oregon Light Green: Fed $7.25

Yellow: Oregon $9.25
Dark Green: More than Oregon
Green: Higher than Federal but lower than Oregon
Light Green: Federal $7.25

From Oregon State Employment

Recent pushes for an increase in the national minimum wage gained widespread attention in 2012 when department store and fast-food workers staged walkouts in multiple cities. The workers called for a pay raise to $15.00 per hour, a figure that has become a rallying point for many proponents of raising the minimum wage. The federal minimum wage has been $7.25 since 2009 and hasn’t increased, but some states and cities recently raised their own minimum wages.

Oregon’s minimum wage has been one of the highest in the nation since the passage of Measure 25 in 2002. The initiative raised the state’s minimum wage from $6.50 to $6.90 per hour in 2003 and created a new provision for Oregon’s minimum wage to increase each year based on the rate of inflation. After a decade of relatively few discussions about Oregon’s minimum wage, recent proposals are calling for increasing Oregon’s minimum wage from $9.25 per hour to $13.50 or $15.00 – and they are receiving a lot of attention.

A new report from the Oregon Employment Department details the state’s minimum wage employment. Oregon’s Minimum Wage Jobs: Facts, Figures, and Context can be found at QualityInfo.org.

How Oregon’s Minimum Wage Compares with Other Places

Twenty-nine states have minimum wage rates higher than the federal minimum. Of those, eight states have minimum wage rates above $9 per hour.

In 2015, Oregon’s minimum wage of $9.25 per hour was the second highest in the nation, with Washington State having the highest rate.

Oregon’s minimum wage is adjusted annually for inflation, but with very little inflation over the course of 2015, the minimum wage stayed at the same rate in 2016. As of January 1st, Oregon’s minimum became the eighth-highest in the nation, as increases took effect in several other states. The highest state minimum wages are now in Massachusetts and California, with increases to $10 per hour implemented in 2016.

There are some cities with minimum wages set higher than the national (and state) levels. In San Francisco, the minimum wage is $12.25 per hour, while in Washington D.C. it is $10.50. In Seattle, the minimum wage is higher than in Washington State statewide, but it also varies by business size, with rates of $10.00 per hour for small firms (those with fewer than 500 employees in the U.S.) and $11.00 for large firms. By 2017, Seattle’s minimum wage will be $15.00 for large firms that do not provide medical benefits.

Oregon’s Purchasing Power Outperforms Nation

In Oregon, a fundamental shift occurred in 2002 with the passage of Ballot Measure 25, which increased the minimum wage and tied future increases to inflation. In 2004, Oregon’s minimum wage was automatically adjusted for inflation for the first time, marking a move to annual adjustments in the wage that have maintained purchasing power of minimum wage earnings.

Unlike Oregon’s minimum wage, the federal minimum wage has lost some of its real purchasing power. The national minimum wage in 2016 buys less than it did when it was raised to $7.25 in 2009. To buy the same goods and services today, a worker would have to make $8.14 per hour. So the real purchasing power of the national minimum wage has fallen 89 cents, or 11% since its last increase. In contrast, the purchasing power of Oregon’s minimum wage has increased slightly.

When minimum wage increases are not linked to inflation, the inflation-adjusted minimum wage tends to follow a peak and valley pattern. Relatively large increases in the minimum wage occur irregularly and are followed by years of the minimum wage’s purchasing power being eroded by inflation. This means the real federal minimum wage varies over time, which makes long-term planning more difficult for employers and their workers. Oregon’s minimum wage increases have been frequent and relatively small since the switch to annual increases in 2004, helping the real minimum wage remain steady over the years.

Minimum wage jobs accounted for 100,000 Oregon jobs in the first quarter of 2015, out of a total of almost 1.9 million jobs in the state.

Over the last 15 years, Oregon’s minimum (and sub-minimum) wage jobs have accounted for between 4 and 6 percent of the total number of jobs.

In the first quarter of 2015, more than two-thirds of minimum wage jobs were found in three industry sectors: leisure/hospitality, retail trade, and natural resources/mining. While these sectors captured 69 percent of minimum wage employment in the state, they represented just 26 percent of Oregon’s total number of jobs.

Some Occupations Have Many Minimum Wage Jobs

There are four occupations that employ more than 15,000 at wages below $10 per hour: food preparation and serving workers, including fast food; waiters and waitresses; retail salespersons; and cashiers.

Some Areas Have More Minimum and Low-Wage Jobs

Overall, minimum wage workers made up 5 percent of Oregon’s workforce at the beginning of 2015. Urban counties tend to have the lowest shares of minimum wage workers. In rural counties, the share of minimum wage jobs is higher. While minimum wage jobs make up a larger share of jobs in rural counties, they account for a relatively small share of the total number of minimum wage jobs in the state.

Oregon has 13 metropolitan and 23 nonmetropolitan counties. Around 87 percent of jobs in Oregon are in urban areas, while rural counties account for 13 percent of jobs statewide. When it comes to minimum wage jobs, the rural share jumps to 18 percent, but in sheer numbers the minimum wage jobs in rural areas are dwarfed by the volume of minimum wage work in urban areas. Oregon’s urban counties account for more than 80,000 minimum wage jobs, while fewer than 19,000 are in the rural counties.

As wages get higher, urban areas take up a greater and greater share of jobs. Urban Oregon counties capture 82 percent of jobs paying $9.25 or less, 84 percent of jobs paying $9.26 to $14.99, and 88 percent of jobs paying $15 or more per hour.

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