Previously the minimum wage in both states were already some of the highest in the country and were both adjusted to the consumer price index each year. After the stepped increases both state's minimum wages will again increase annually based on the consumer price index.
For perspective, in Oregon, the minimum wage increased by $2.75 per hour over the past 15 years or which is an annual average of 2.8% per year. Over the next 6 years it will increase by $5.50 per hour or an average increase of 10% per year.
Although the minimum wage rate does not directly impact us, it does indirectly. We have always paid above minimum wage for our entry labor position. Our work is harder and requires more effort than most traditional minimum wage jobs. Our current entry level wage is at $14.00 per hour and has increased significantly over the past 2 years due to the low unemployment levels and our great economy. The wage pressure caused by the increase in minimum wage will not directly impact us however, it will indirectly due its effect on the strong economy and low unemployment rates.
Setting all political opinions aside as to whether it was "the right thing to do", we all must understand that it will impact the cost of products and services we all use. We at Pacific have always worked hard to offset inflationary impacts to our pricing through efficiency improvements and innovation. In a slower economy we were somewhat able to absorb the historical 2.8% labor cost increase through improved efficiency and innovation. With the pending 10% annual labor increases, combined with a hot economy, our industry as well as most service industries, will see prices increase greater than in recent history.
Say goodbye to the five dollar foot-long and dollar menu.
Seattle Times: Voters Approve Minimum Wage Increase
