Oregon’s Bureau of Labor and Industry (BOLI) announced today that the state’s minimum wage will not increase in 2016, eliminating the only shot at a raise that thousands of workers had in the coming year. Approximately 100,000 Oregon workers – six percent of Oregon’s workforce – currently work for minimum wage and would have benefited from an increase.
Oregon’s minimum wage falls short for workers and communities
Oregon voters last approved a minimum wage increase in 2002. Since then, BOLI has used a formula based on the national Consumer Price Index to increase the wage periodically. In 2015, BOLI raised the wage 15 cents to $9.25. For 2016, the BOLI formula did not yield a wage increase. But even when workers do receive small increases, the wage is not enough for workers to afford the basics, no matter where they live. Full-time minimum wage workers in Oregon earn $19,240 per year (just $1,600 a month)—well short of what they need to make ends meet. Every year we don’t increase the minimum wage, life becomes more difficult for thousands of Oregonians as the cost of living continues to outpace wages in every area.
In Enterprise, where average rents are some of the lowest in the state, a worker would need to earn an hourly wage of approximately $13.50 to afford a two-bedroom apartment. In other areas of the state, housing costs are much higher. In Portland, a worker would need to earn an hourly wage of at least $18.15 to afford a two-bedroom apartment.
Worker productivity continues to rise while wages stagnate
In the decades following World War II, the minimum wage kept pace with rising productivity. That period saw the rise of a broad middle class. In 1968, the federal minimum wage — which at that time set Oregon’s wage floor — reached its all-time high, when adjusted for inflation. Since 1968, worker productivity has been on a steady upward climb, while the minimum wage has declined when adjusted for inflation.
While Oregon’s minimum wage is adjusted annually for inflation, the disparity between productivity and wage increases remains. Although common measures of prosperity have shown that Oregon’s economy has been on an upswing in recent years, low-income working families have not shared in the benefits. From the end of the Great Recession in 2009 to 2014, low-wage workers – the bottom fifth of wage earners in Oregon – saw their wages decline by more than 5 percent. Over the same period, worker productivity nationally increased by more than 5 percent.
Create a higher wage floor and expand local control to boost economic success for all workers
Thousands of working families around Oregon are trying to get by on the same low wage – even though it costs more to live in some counties than others. Housing, childcare, and other expenses all vary throughout the state. As the rules are currently written, cities and counties in Oregon don’t have the power to raise wages, limiting their ability to help families that live in the communities where they work. Updating state law to restore local control will allow officials to apply their knowledge of what works in their community and provide them with a valuable tool to grow their local economy.
