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Oregon's minimum wage to jump to $8.40

Mitch Lies, Capital Press 9/16/08

SALEM - A 45-cents-an-hour increase in Oregon's minimum wage announced Tuesday, Sept. 16, will impair Oregon agriculture's ability to compete in a global marketplace, according to the Oregon Farm Bureau.

The Oregon Center for Public Policy, a Silverton-based think tank, on the other hand, said the increase isn't enough.

"The pay raise that Oregon's minimum wage earners will get next year may not be enough to make up for the rise in prices at the supermarket or the pump," Michael Leachman, policy analyst for the Oregon Center for Public Policy, said in a prepared statement.

The 5.3 percent increase, which kicks in Jan. 1, puts Oregon's minimum wage at $8.40 an hour. It is expected to be the second highest minimum wage in the country behind only Washington's, which is expected to announce its wage increase later this year.

"This increase is going to have a serious effect on Oregon's ability to compete in the global economy and is proof positive that the way we calculate our increases for minimum wage is arbitrary to what is going on in Oregon's economy," said Shawn Cleave, an associate director of government affairs for the state Farm Bureau.

"In the current state of the economy to be hitting small businesses with increases in any costs I think is a bad idea," said Elizabeth Peters, communications director for the Oregon Association of Nurseries.

The Oregon Bureau of Labor and Industries annually adjusts Oregon's minimum wage based on changes in inflation as measured by the Consumer Price Index. The index tracks price changes in goods and services in several major U.S. metropolitan areas.

Cleave said the formula doesn't take into account economic conditions in rural areas.

"The calculation isn't based on Oregon's economy," Cleave said. "It's based solely on Oregon's largest cities and what their economies are doing."

The annual wage adjustment impacts a farm's payroll up and down the pay scale, Peters said, as farmers say they are forced to adjust wages for highly skilled workers to compensate for increases to starting wages.

"When you have an increase like this, it impacts everyone across the board," Peters said.

She said the association has learned recently that several nurseries have begun laying off workers.

"We are starting to see numerous layoffs because the economy is struggling," Peters said. "Tying the minimum wage to an index that increases every year is bad policy."

"It's ironic that our economy continues to slide," Cleave said, "and we're talking about the largest minimum wage increase in the history of the current law."

Leachman countered by saying "dire predictions of the farm and restaurant industries that Oregon would be rendered uncompetitive" have yet to materialize in the six years since Oregon voters set in motion the annual minimum wage adjustment.

"Both industries have flourished," he said.

Voters initiated the annual wage adjustment in 2002 when they approved a ballot measure that increased the minimum wage from $6.50 to $6.90 an hour and called for the state to adjust the wage annually.

The federal minimum wage increased from $5.85 to $6.55 an hour on July 24. It will raise to $7.25 an hour July 24, 2009.
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