Oregon's Three Minimum Wages

On March 2, 2016, Senate Bill 1532 was signed into law. As a result, Oregon's minimum wage will increase in steps through 2022. There will be three tiers of step increases, based on geography.

The minimum wage in the Portland urban growth boundary will increase more than the minimum wage in the rest of the state. It is set to increase to $14.75 by 2022. Areas other than those in the Portland tier will increase to $13.50, and nonurban areas will increase to $12.50.

The first increase in minimum wage as a result of SB 1532 will take place on July 1, 2016. This increase will affect nonurban areas differently than the rest of the state. Minimum wage will increase to $9.50 in nonurban areas, while the rest of the state will see minimum wage increase to $9.75.

Beginning in 2023, minimum wage in all tiers will be adjusted for inflation. This means the minimum wage will maintain purchasing power after the last step increase in 2022.

We have received a number of requests for an estimate of the number of jobs affected on July 1, 2016. While this is tricky because we do not know how many jobs, let alone minimum wage jobs, there will be in Oregon on July 1, 2016, we can use past data to make a guess.

Our best way to estimate this is to look at how many jobs paid at or below the new minimum wage level in the second quarter of last year (we choose second quarter – April, May, June – because it is the quarter leading up to July 1). In other words, we count the number of jobs that would have been affected if the minimum wage increase set to happen on July 1, 2016 actually happened in 2015.

In the second quarter of 2015, (i.e., the quarter leading up to July 1), about 203,000 jobs paid at or below the new minimum wage scale. The approximate Portland urban growth boundary had about 83,000 jobs at or below the $9.75 per hour that will take effect on July 1, 2016. About 96,000 jobs were at or below $9.75 in the other areas that will increase to this level. Nonurban areas, which will see minimum wage increase to $9.50 on July 1, 2016, had about 23,000 jobs at or above $9.50 in the three months before July 1, 2015.

It is likely that the minimum wage increase on July 1, 2016 will affect at least as many jobs as we saw at or below the new minimum wage last year. In other words, it is likely there will be at least 203,000 jobs affected by the minimum wage increase on July 1, 2016. Since Oregon's job growth has been strong over the year, there is potential for the number of jobs affected to be greater than 203,000.