Wednesday, June 28, 2017

Number of Jobs Affected by the July 1st Minimum Wage Increase

Oregon’s minimum wage increases on July 1, 2017, but the raises won’t be the same across the state. Minimum wage increases to $11.25 per hour inside the Portland urban growth boundary, $10.00 per hour in nonurban counties, and $10.25 in other areas of the state.

It is tricky to estimate the number of jobs that will be affected on July 1st because we do not know how many jobs, let alone minimum wage jobs, there will be in Oregon on July 1, 2017. However, we can use past data to estimate how many jobs the minimum wage increase will directly affect this year. Our best way to do this is to count the number of jobs that would have been affected if the minimum wage increase set to happen on July 1, 2017 was applied to jobs in July, August, and September of 2016.

In the third quarter of 2016, about 301,000 jobs paid below the new minimum wage scale. The approximate Portland urban growth boundary had about 159,000 jobs paying below the $11.25 per hour that will take effect on July 1, 2017. About 113,000 jobs were paying below $10.25 in the other areas that will increase to this level. Nonurban areas, which will see minimum wage increase to $10.00, had about 28,000 jobs paying below $10.00 in the third quarter of last year.

It is likely that the minimum wage increase on July 1, 2017 will affect at least as many jobs as we saw at or below the new minimum wage last year. Since Oregon’s job growth has been strong over the year, there is potential for the number of jobs affected to be greater than 301,000. However, not all jobs are subject to the minimum wage and workers in these jobs may continue to earn less. These factors impact the estimate of the number of jobs directly affected by the minimum wage increase on July 1.

See the full article "Oregon’s Minimum Wage to Increase Each Year Through 2022" by State Employment Economist Nick Beleiciks.

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