Wage hike looms
Updated: Thursday, October 21, 2010 9:59 AM
Slight level of inflation yields 10-cent increase
By MITCH LIES
Oregon businesses will pay workers a minimum of $8.50 an hour next year, 10 cents more than this year's minimum wage and $1.25 above the federal minimum.
The increase, announced Sept. 20, puts Oregon second only to Washington as the state with the highest minimum wage.
Washington, which has an $8.55 minimum, is expected to announce its annual minimum wage adjustment Sept. 30.
Oregon and Washington are among 10 states that annually adjust their wage based on the U.S. Consumer Price Index, a measure of inflation based on the cost of goods and services in metropolitan areas. The 10-cent increase mirrors a 1.15 percent increase in the index.
Oregon's minimum wage held steady last year in spite of the fact the index declined. Oregon's law does not allow the minimum wage to decrease. Voters in 2002 approved a measure enacting the annual wage adjustment.
The 10-cent wage increase comes at an inopportune time for many Oregon farmers, who are trying to recover from the economic downturn of the last two years, said Katie Fast, director of government affairs for the Oregon Farm Bureau.
"We're coming off one of the worst farm income years in the last 10 years," Fast said. "And from talking to folks, 2010 isn't much better in many sectors. Now we're getting hit with the increase in labor costs."
Oregon Labor Commissioner Brad Avakian said the increase will help Oregon workers survive a slowly increasing cost of living.
"By helping workers and their families preserve their purchasing power in difficult times, our strong minimum wage law also benefits our local economies, where workers spend most of their paychecks," Avakian said in a prepared statement.
Fast said several farm sectors will be hurt by the annual adjustment, including nurseries and dairies, which were hit especially hard by the economic downturn.
In both sectors, labor is the biggest cost of production, Fast said.
"We're so far above the federal minimum wage, it puts us at a cost disadvantage in competing against other states," she said.
Only nine states have minimum wages of $8 or more.
Fast said most farmworkers earn well above minimum wage, but each time it increases, farmers adjust wages up and down the pay scale.
"As you bring on startup workers at minimum wage, you have to increase the wage of other workers to have it be a fair cost adjustment," she said.
"The big issue we have is this is not a one-time thing," Fast said. "This is happening annually to our folks."
Oregon's new minimum wage takes effect Jan. 1.
Oregon Bureau of Labor and Industries: www.oregon.gov/BOLI
Washington State Department of Labor and Industries: www.lni.wa.gov