09:56 AM PDT on Friday, September 16, 2005

Associated Press

EUGENE -- Oregon's minimum wage, already the second-highest in the nation, will rise by a quarter to $7.50 an hour next year.

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The 3.4 percent increase will be formally announced Friday by Oregon Labor and Industries Commissioner Dan Gardner, the Register-Guard newspaper reported.

Oregon voters raised the state's minimum wage from $6.50 to $6.90 in 2003. The new law requires the Oregon minimum wage to be adjusted annually in line with the U.S. Consumer Price Index. That lifted the wage to $7.25 last January.

Washington, which also adjusts its minimum wage annually based on federal cost-of-living data, has the nation's highest minimum wage at $7.35 an hour. Washington will calculate its new rate this month and announce the change -- also effective Jan. 1 -- at the end of September.

The federal minimum wage has remained stuck at $5.15 an hour since 1997.

Industries that employ lots of minimum-wage workers, such as restaurants and agriculture, oppose Oregon's minimum wage and its automatic upward indexing.

"One of the issues I have with the minimum wage (increases) is that they don't seem to be helping the people that they claim they want to help," said Bill Perry of the Oregon Restaurant Association, noting that Portland has a high unemployment rate compared to other urban areas.

But Chuck Sheketoff, executive director of the Oregon Center for Public Policy, which supports the higher minimum wage, cited government statistics showing that restaurant jobs in Oregon rose by 7.7 percent from 2002 to 2005, compared with 4.1 percent job growth among nonfarm sectors statewide.

In the legislative session this spring, lawmakers passed a special state tax credit to help farmers offset higher wage costs, but Gov. Ted Kulongoski vetoed the bill.

Don Schellenberg of the Oregon Farm Bureau said farmers won't be happy with the higher wages.

"They will greet this with dismay, the problem being of course that they don't have the ability to pass along the cost," he said. "That's the problem with natural resources and agriculture -- we don't set the prices for the products that we sell."