Update--Oregon Minimum Wage, Take 2: From 2016-2022 Oregon's Minimum Wage Increased at a HIGHER Rate than the Increase in the CPI for ALL Items AND For Rent of Primary Residence.

I took a careful look at the Oregon minimum wage statute and realized that the annual CPI adjustment is based on the US CPI and NOT the WEST CPI. 

I have added a comparison of the minimum wage increase to the text and also added a graph to show the use of the US CPI for both all items and for rent of primary residence.

Because the US CPI increase was lower than the West CPI (20.7% vs 24.3%) the gap between the Oregon minimum wage and the US CPI was HIGHER than when using the West CPI. 

The same larger gap occurs when using the US vs West rent of primary residence CPI ( 23% vs 28.1%). 

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2023 is the first year that the Oregon minimum wage is being adjusted by the West Urban ALL Items COLI. In past years the adjustment was a flat dollar adjustment fixed by statute. 

This means that moving forward the annual increase in the Oregon minimum wage will track the increase in the West Urban All items index from March to March, with small tweaks possible because of rounding. 

I thought it would be useful to see how the prior 2016-2022 flat dollar increases compared to the West Urban ALL Items COLI and the West Urban, Rent of Primary Residence COLI. (I used the 2016 and 2022 March COLI index values for comparison; March is the same month used by BOLI to calculate the annual change for 2023 and moving forward). 

The results in the graph pasted below show that for ALL areas in Oregon the cumulative rate of 2016-2022 minimum wage increases was HIGHER than the increase in both the WEST ALL ITEMS and WEST RENT of primary residence COLI index changes.  

Using the US CPI the gap between the Oregon minimum wage increase and CPI for both all items and rent of primary residence was even higher. The second graph shows those comparisons. 

US CPI Comparison

The standard minimum wage increase was 38.5%, the Portland Metro increase was 51.3%, and the Non Metro increase was 31.6%. 

These compared to a LOWER ALL ITEMS West Urban COLI increase of 20.7%, and a West Urban RENT of primary residence COLI increase of 23%. 

West CPI Comparison

The standard minimum wage increase was 38.5%, the Portland Metro increase was 51.3%, and the Non Metro increase was 31.6%. 

These compared to a LOWER ALL ITEMS West Urban COLI increase of 24.3%, and a West Urban RENT of primary residence COLI increase of 28.1%. 

Bottom line: 2016-2022 minimum wage increases were higher than West All ITEMs and RENT of Primary Residences COLI from 2016-2022. Moving forward minimum wage increases will NOT be higher but instead identical. 

Originally created and posted on the Oregon Housing Blog.