Eastern Oregon’s Minimum Wage – July 1, 2021

by Christopher Rich

June 22, 2021

Wage estimates from third quarter 2020 reveal that 6.7% of all jobs in Eastern Oregon (Baker, Grant, Harney, Malheur, Morrow, Umatilla, Union, and Wallowa) paid the minimum wage while 33.0% of jobs in the region paid less than $15.00 per hour. In comparison, 6.1% of jobs statewide paid the minimum wage while 21.0% paid less than $15.00 per hour.

Set at $11.50 per hour for nonurban counties in 2020, the minimum wage steps up to $12.00 per hour on July 1, 2021. Urban counties will see the minimum wage set at $12.75 while the Portland Metro area will reach $14.00. Minimum wage will see one more pre-set step increase a year from now. In July 2022, the minimum wage will increase to $12.50 for nonurban counties, $13.50 for urban counties, and $14.75 for Portland Metro. Starting in 2023, minimum wage will be tied to the Consumer Price Index (CPI) with urban counties set as the standard minimum. Minimum wage for nonurban counties will be $1.00 less than the standard and minimum wage for Portland Metro will be $1.25 above than the standard.
Wage Hike Felt Most in Baker, Harney, and Malheur

In terms of total county employment, Morrow had the smallest share of minimum wage jobs in 2020. Just 3.9% of Morrow County’s 6,794 jobs paid minimum wage. Morrow also had the smallest share (21.2%) of jobs below $15.00 per hour. Three counties saw minimum wage jobs account for more than 10% of total employment: Baker at 10.1%, Malheur at 10.5%, and Harney at 12.2%. These counties also saw the largest share of jobs below $15.00 per hour: Baker and Harney at 38.0% and Malheur at 41.8%.

Umatilla County accounted for the largest share of minimum wage jobs in Eastern Oregon as a region. At 1,842 jobs, Umatilla supplied 32.5% of all minimum wage jobs in the region. This isn’t surprising given Umatilla’s hefty share (43.8%) of Eastern Oregon employment. In terms of proportions, however, Umatilla accounted for fewer minimum wage jobs than would be expected. Malheur County on the other hand accounted for more than would be expected. Malheur supplied 27.3% of all minimum wage jobs in the region while accounting for just 17.6% of Eastern Oregon employment. Union County also supplied a large portion (12.6%) of the region’s minimum wage jobs, more closely in line with the county’s 13.3% share of Eastern Oregon employment.

Wage Hike Felt Mainly in Three Sectors

Nearly two-thirds of Eastern Oregon jobs that paid minimum wage and just over 60% of those that paid less than $15.00 per hour were found in three broad sectors (out of 15): natural resources and mining; retail trade; and leisure and hospitality. Seasonal hiring patterns, education levels, and required skillsets heavily influence low-end wages in these sectors. Seasonal spending drives labor demand in leisure and hospitality and also influences retail trade hiring. Seasonal harvesting drives Eastern Oregon’s labor demand in natural resources and mining due to the sector’s significant agriculture component. Many seasonal jobs – such as retail salespersons; food and beverage servers; and farmworkers and laborers for crops – call for workers to perform repetitive tasks. Education and skill requirements for these positions are often low, which can lead to a large supply of qualified applicants and low wages.
Roughly one-third of all jobs that paid minimum wage in Eastern Oregon were in leisure and hospitality. For the region’s leisure and hospitality sector, 23.9% of jobs paid minimum wage while 70.6% paid less than $15.00 per hour. Statewide, 19.0% of leisure and hospitality jobs paid minimum wage while 51.0% paid less than $15.00. Food services and drinking places supplied more than three-fourths of all leisure and hospitality jobs in Eastern Oregon in third quarter 2020. The expectation of tips likely boosts total expected compensation for many positions, at the same time putting downward pressure on employer paid wages.

At 17.6%, retail trade accounted for slightly more than half as many minimum wage jobs as leisure and hospitality in Eastern Oregon. The industry also had a larger share of jobs in higher-wage categories. This is likely due to the absence of tips as expected compensation and possibly a greater availability of low and mid-level management jobs that help boost employer paid wages. For the retail trade sector, 9.6% of jobs paid minimum wage while 52.2% of jobs paid less than $15.00 per hour. Statewide, 11.7% of retail trade jobs paid minimum wage while 41.2% paid less than $15.00 per hour.
Natural resources and mining accounted for 14.7% of Eastern Oregon’s minimum wage jobs in 2020. Minimum wage jobs accounted for 6.8% of jobs in the sector while 51.2% paid less than $15.00 per hour. Statewide, 6.6% of natural resources and mining jobs paid minimum wage while 34.4% paid less than $15.00 per hour. Natural resources and mining is the largest of the 15 broad sectors in Eastern Oregon (14.7% of total jobs) with 84.2% of the industry’s employment in Umatilla, Malheur, and Morrow counties. The bulk of minimum wage jobs in the sector were in two of these counties. Malheur County accounted for 56.1% of the sector’s minimum wage jobs while Umatilla County accounted for 23.9%.

Pandemic Affects the Estimated Increase

An estimated 6.7% of Eastern Oregon jobs should see a pay increase tied directly to the minimum wage hike in July, 1,418 jobs less than the estimate from last year. While this sounds like a significant number of minimum wage jobs moved into a higher wage category, this probably isn’t the case. The estimated number of jobs directly affected (minimum wage jobs) this year by the minimum wage increase is lower primarily because it’s based on wage data from third quarter 2020, which was impacted by the COVID-19 pandemic.

Two employment shifts in wage categories occurred in Eastern Oregon between third quarter 2019 and third quarter 2020. One was an increase of employment in higher-wage categories driven mainly by a tight labor market putting upward pressure on wages: the number of jobs that pay $15.00 per hour or more increased by 3,875. The second was a decrease of employment in lower-wage categories driven largely by the pandemic: The number of jobs that pay less than $15.00 per hour decreased by 9,200. The net effect was a loss of 5,325 lower-wage jobs. Many of these were minimum wage jobs.

Since third quarter 2020, the region has seen significant improvement in most affected industries. A majority of jobs lost have been recovered, which implies many of these under $15.00 per hour jobs have been added back. In addition, even though COVID-19 restrictions greatly reduced employment in the restaurant industry in 2020, the industry has seen continued upward movement, which implies upward movement in the number of minimum wage jobs as well. Because of this, the actual number of jobs expected to see a pay hike directly from the minimum wage increase in July is likely to be higher than 5,667. Although, leisure and hospitality has yet to regain pre-pandemic employment levels and still looks to be below seasonal expectations in July when the minimum wage increases.

Each year the Oregon Employment Department produces a series of wage tables for Oregon’s 36 counties. These tables detail the number of jobs by wage category for 13 broad private sectors as well as state and local government. Although these county level tables are not published on Qualityinfo.org, they are available upon request. If you would like one on your county, please contact me at Christopher.M.Rich@Oregon.gov.

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