Oregon is trailblazing a national debate with a proposal that would not only make the state’s minimum wage for all workers the highest in the US, but would do so through a unique tiered system based on geography.



As the federal minimum wage has sat unchanged since the start of the Great Recession, more than a dozen states have raised the rate within their borders in recent years. Another dozen or so are considering taking up the issue this year as issues of wage inequality and middle-class incomes have climbed to the forefront of presidential campaigns by Democratic candidates Bernie Sanders and Hillary Clinton.

Oregon is taking a new approach. The state house of representatives on Thursday approved an unprecedented three-tiered system that sets different rates by region. The state senate already has approved the bill, and now it will head to the Democratic governor, Kate Brown, for final sign-off. Brown has said she supports the plan.



The proposal would start a series of gradual increases over six years: Oregon’s current $9.25 an hour minimum – already one of the highest in the nation – would jump to $14.75 in metro Portland, $13.50 in smaller cities such as Salem and Eugene, and $12.50 in rural communities by 2022.

Those minimums would dethrone Massachusetts – where the statewide rate will climb to $11 an hour next year – from the top spot, according to the Washington DC-based Economic Policy Institute, which has been tracking wage increases across the nation.

States have taken various approaches to raising their own minimum wages. Some target government employees or certain industries, as seen recently in New York for fast-food workers, while some states allow local jurisdictions to set their own rates above the state threshold, which prompted recent hikes in cities such as Seattle and Los Angeles.

Oregon is unique because it would be the first state without a one-size-fits-all statewide minimum for all workers. The state is deeply divided between west and east by economic, cultural and political differences. The goal of the tiered approach is to balance the needs of the more urban west, where living costs have soared in rapidly growing Portland, and struggling farming communities in the east.

“Oregon has always been at the forefront of new ideas in the country. We were the first to actually have a minimum wage,” said congressman Paul Holvey, a Democrat from Eugene. “We’re trying to move people to where they can reach closer to that self-sufficiency.”

At one point on Thursday, while the House debated the tiered plan, demonstrators marched through the Oregon calling for an increase in the minimum wage, among a list of other demands.

Division over the minimum wage – currently at $7.25 in federal law – is often split along party lines and pits low-wage workers against business groups, as has been seen in Oregon this year.

The Oregon plan follows moves in states such as Massachusetts, California and Vermont that recently boosted statewide minimums above $10. That stands in stark contrast to more conservative states such as Idaho, which has blocked previous efforts to raise its minimum beyond the federal level, and Arizona, where lawmakers are considering a bill that would cut state funding to municipalities that set a local minimum wage.

David Cooper, an economic analyst the Economic Policy Institute, said he applauds the Oregon legislature for its creative tiered approach but did express hesitation.

“I think any time you create these sorts of somewhat arbitrary geographic districts, that’s when you can create opportunities for some sort of economic disruption,” he said. “I would prefer the whole state got to the same wage level but at a slower pace by region so that everyone is held to the same standard.”

