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Oregon CPI Drops – Yet Minimum Wage Rises?

September 29, 2010

Minimum wage will increase in 2011 despite overall decrease in state CPI
By  J.L. Wilson
Associated Oregon industries,

Oregon employers will find themselves disadvantaged once again in 2011 by Oregon’s minimum wage law that increases the state minimum wage based on increases in the state Consumer Price Index (CPI). Oregon’s CPI is actually lower than 2008 levels – yet Oregon employers will face a .10 cent/hour hike in the minimum wage to $8.50 per hour.

How is this happening?

In September 2009, Oregon Labor Commissioner Brad Avakian announced that Oregon’s minimum wage rate would stay static (at $8.40 per hour) in 2010 based on a falling Oregon CPI. In his announcement, Avakian highlighted that Oregon’s CPI had declined by 1.48% in 2009, but Oregon’s minimum wage law did not allow him to make a downward adjustment to the minimum wage.

This week, Commissioner Avakian announced a .10 cent increase in the minimum wage for 2011 based on a 1.15% increase in Oregon’s CPI.

The net effect: Oregon’s CPI is 0.33% lower than it was two years ago, yet Oregon employers will see an increase in the state minimum wage. Oregon takes yet another small step toward being uncompetitive in the competitive marketplace.

A reasonable solution: AOI will introduce legislation that will require the Labor Commissioner to credit employers the full decrease in the CPI before increasing the minimum wage in subsequent years. As applied to current law, Oregon’s minimum wage would be held static again in 2011 and the next minimum wage increase would not be triggered until the CPI increased by at least 0.33%. Under this solution, the minimum wage would never go down, but the wage would be an accurate reflection of the CPI going forward.

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Discuss this article

Bob Clark September 29, 2010

This move to compensate industry for CPI decreases makes sense although the very strict nature of the minimum wage makes no sense. The whole concept of minimum wage only makes sense as a guideline rather than a strict rule. I view the minimum wage as sort of akin to the tipping guideline of 15% for restaurants. But we don’t make tipping mandatory because sometimes the service deserves more than 15% and sometimes much less, if any.

I really think gubernatorial candidate Chris Dudley has a very innovative idea in his training wage idea, which would allow flexibility to the minimum wage, so as to encourage businesses to hire young people seeking to gain work experience. Work experience is a very big obstacle for gaining entry into the work force, and having such experience does wonders for one’s resume.

Hats off to the innovativeness of Chris Dudley.

theo September 29, 2010

Are most biz people sure the gubmint reports real stats? shodow government stats in google might answer this question

Terry Pratt October 1, 2010

There is an easy legislative fix, which a new Legislature and new governor might address.

But somehow I consider it unlikely restaurants, convenience stores, and other minimum wage employers are going to close their doors and move to Idaho.

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