Oregon’s Minimum Wage Consistently about Half the Median Hourly Wage

As of January 1, 2014, Oregon’s minimum wage is $9.10. Oregon has the second highest minimum wage in the nation behind our neighbor to the north, Washington, at $9.32. Nationwide, the minimum wage is $7.25.

Over the past decade in Oregon, the minimum wage has been about 50 percent of the median wage. In 2013, the median wage for all workers in Oregon was $17.53, almost double the minimum wage that year. The median wage is the wage at which 50 percent of workers earn less than the stated wage and 50 percent earn more. The median wage tends to be a better indicator (compared to the mean) of what the “average” worker might earn, as it is not as affected by very high wages.

Both the minimum and median wages have increased by a similar percentage since the early 2000s. From 2001 to 2013, the average annual percentage increase for the minimum and median hourly wages is 2.51 percent and 2.58 percent, respectively. However, the percent change for the minimum and median wages varies from year to year, where some years the median wage increases by a larger percentage or vice versa.

Wages are influenced by a variety factors, one of which – the rate of inflation – likely explains the similarity in the increases of the median and minimum wages over the years. In fact, since 2002, adjustments to Oregon’s minimum wage are calculated each year based on the inflation rate, specifically the U.S. City Average Consumer Price Index for All Urban Consumers for All Items (CPI-U).