Starting Jan. 1 of this new year, Oregon raised its minimum wage $0.20, from $8.95 to $9.10. The wage increase is the result of a 2002 ballot measure passed to keep up with inflation. Oregon’s minimum wage is the second highest in the nation, $5.90 short of Washington state’s new minimum wage. Workers will be making a total of $312 more annually for a full-time wage worker, according to Oregon Center for Public Policy.
According to Brian Rooney, regional economist for the Oregon Employment Department, there are about 150,000 statewide minimum wage workers in Oregon. In Lane County, there are roughly 15,000.
“(The wage increase will) more likely than not reduce poverty and will not increase the unemployment rate,” said Ed Whitelaw, economics professor at University of Oregon and founder of ECONorthwest.
However, Whitelaw added that some businesses such as restaurants, which are operating close to the black, or close to not making a profit, may choose to shut down because they will not be able to pay their employees $0.15 more an hour.
If employers do decide to continue operating, they will be taking home less money because they will be paying their employees more, according to Whitelaw.
Chuck Sheketoff, executive director of OCPP, said that although the new wage increase keeps the wage floor up with inflation and helps low-wage workers make ends meet, the wage increase is “not high enough.”
“It will definitely help people out of poverty. There’s no question about that, but enough? Not quite,” Sheketoff said.
Sheketoff believes that minimum wage in Oregon will need to be increased to about $15 an hour, like in Washington, for there to be a significant change.
According to the Federal Poverty Guidelines of 2013, a single parent with two kids would need to be making more than $9.39 an hour to stay above the poverty level.
Sheketoff said that he predicts the $0.15 increase will help lift a single parent with one child out of poverty.
A study done by Portland State University shows that between 2010 and 2011, Oregon poverty levels increased from 15.8 percent to 17.3 percent and tied with Oklahoma for the 16th highest poverty level in the nation. In 2011, 21.1 percent of Lane County residents were living in poverty.
Oregon business leaders have outlined a plan to reduce Oregon’s poverty rate from 17.2 percent in 2012 to 10 percent by 2020 and discussed this at Oregon Business Plan’s 11th annual Leadership Summit last month.
Across the nation, 12 other states increased their minimum wages this new year. As of Jan. 1, 2014, a total of 21 states have a minimum wage higher than the federal level of $7.25.
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