Oregon’s lowest-paid workers will be earning more beginning Thursday, July 1 — as much as $14 an hour for some.
It’s the sixth of seven increases the Legislature mandated in 2016, which have steadily raised the state’s hourly minimum from $9.25. Oregon will have one of the highest minimum wages in the nation when the new rates kick in Thursday, but the rate varies considerably depending on where you work.
Oregon lawmakers took an innovative approach, mandating different minimums for different regions of the state, so the $14 hourly minimum applies only to the three counties in the Portland metro area.
Employers in Deschutes and other so-called standard counties will pay $12.75 an hour. Those in Crook, Jefferson and other nonurban counties will pay $12.
The difference is meant to account for lower costs of living outside the metro area.
The nation’s highest statewide or districtwide minimum wage is in Washington, D.C., at $15 an hour. Washington state’s hourly minimum is $13.69. Massachusetts’ is $13.50, and California’s is $13. Many cities or counties have higher minimum wages than their states.
When Oregon’s higher minimums kick in Thursday, the wage floor in the Portland area will have climbed by more than 50% since 2016. That works out to nearly $10,000 more annually for a full-time worker earning the Portland area’s higher minimum wage.
The minimums rise again in July 2022, topping out at $14.75 an hour in the Portland area, $13.50 in Deschutes County and $12.50 an hour in Crook and Jefferson counties. Subsequent increases will be tied to inflation.
The federal minimum wage, meanwhile, has been stagnant at $7.25 an hour since 2009. There is a general agreement in Congress that the national minimum should rise, but Republicans and Democrats have been unable to agree on how much and how quickly.
That reflects a perennial debate among economists over how much higher minimum wages inhibit job growth, the fear being that employers will hire fewer workers if they must pay them more. There’s no debate, though, that it’s easier to raise wages when the economy is strong.
Oregon’s succession of minimum wage increases coincided with a long stretch of economic growth, when the state’s jobless rate was at historic lows – dependably below 4% in the months before pandemic recession hit.
And even as the minimum wage rose, the number of Oregon workers earning the minimum steadily declined from 7.3% in 2018 to 6.6% in 2019 and just 6.1% last year. Some 123,000 workers statewide earned the minimum in 2020, according to the Oregon Employment Department.
That could suggest that employers were raising wages to attract workers during the strong economy, not only because the state was mandating higher pay.
Of course, the pandemic changed everything. Many low-wage workers lost their jobs last year when bars, restaurants and other hospitality sectors cut back or shut down. That meant fewer workers in those industries, and fewer workers earning the minimum.
And now, with employers facing a labor shortage, there is evidence that wages are rising for a new reason — employers racing to reopen after the pandemic are paying more so they can staff up quickly and capitalize on the economic rebound.