PORTLAND - Labor Commissioner Dan Gardner on Sept. 16 announced that, based on an inflation rate of 2.2 percent, Oregon's minimum wage will increase by $.15 from $6.90 per hour to $7.05 per hour. This cost of living adjustment will take effect Jan. 1, 2004.
In November of 2002, Oregon voters passed Ballot Measure 25, which increased Oregon's minimum wage of $6.50 per hour to $6.90 per hour effective Jan. 1, 2003. In addition to the increase, Ballot Measure 25 requires the Commissioner of the Bureau of Labor and Industries to annually adjust the minimum wage for inflation based on a rise in the Consumer Price Index. The annual adjustment is to be calculated every September, rounded to the nearest five cents and becomes effective the following January.
"Indexing provides small and predictable increases for businesses," said Commissioner Dan Gardner. "Use of the CPI adjustment offers businesses the ability to budget more effectively and accurately for increased costs."
The State of Washington also annually adjusts its minimum wage based on the CPI. The U.S. Bureau of Labor and Statistics publishes the CPI, a measure of the average change in prices over time in a fixed "market basket" of goods and services, such as food, shelter, medical care, transportation fares and other goods and services people purchase for day-to-day living.
"Overall most low-wage workers pump every dollar of their paychecks directly into the local economy by spending their money in their neighborhood stores, local pharmacies, and corner markets," Gardner said. "When the minimum wage increases, local economies benefit from the increased purchasing power of low-wage workers and their families."
According to Chief Petitioner for Ballot Measure 25 State Rep. Diane Rosenbaum, D-Portland, thousands of Oregon families are struggling to escape poverty while working full-time at minimum wage jobs. Rosenbaum said this modest increase will help low-wage workers put food on the table and a roof over their heads.
Prior to the passage of Ballot Measure 25, Oregon's minimum wage had not increased since 1999. In 1996, voters approved a ballot measure that increased the minimum wage by $1.50. The 1996 measure went into effect Jan. 1, 1997 and was phased in over a three-year period, with the final increase taking effect in January of 1999. The federal minimum wage is $5.15 and has not increased since 1997.
After this adjustment and in January 2004, it appears Oregon's minimum wage will be the fourth highest in the nation behind Alaska and Washington at $7.15 per hour and Connecticut at $7.10 per hour.
Employers will be receiving revised minimum posters reflecting the new minimum wage from the Bureau in December 2003.