Monday, March 28, 2016

New Tiered Oregon Minimum Wage Law Upsets Natural Geographic Wage Differentials

Oregon’s new minimum wage law effective July 1st schedules wage increases July 1, 2016 for the next six years.  The law requires Portland Employers to provide a minimum wage $2.25 an hour higher than the minimum wage for non urban countines. This tiered approach is nonsensical at best in that naturally occurring Geographic Wage Differentials  between metro and non metro areas have existed for decades in every state for most occupations.
Many consulting firms have offered for years Geographic Salary Differential studies outlining salary differentials for jobs between different Geographic Locations.  One of the most in-depth reports is the CompGeo Online Professional Geographic Differentials Report  which contains analysis with drill down to the Job Family Level not found in other such studies and is updated yearly.
The artificial differential in minimum pay rates enacted in Oregon ignores the reality that Geographic Salary Differentials occur as a matter of course due to local cost of living differentials, demand for labor and other economic variables.  This ill conceived law will undermine and upset business planning and competitiveness across Oregon and will eventually lead to for profit enterprises being at a severe disadvantage when compared to other states without such unrealistic and anti-commerce wage limitations.