A 10-cent hike in minimum wage that goes into effect Jan. 1 will allow Oregon to keep pace with the cost of living, but it will do little to help either workers or small businesses get a leg up in the flat-lined economy, local residents and business owners say.

A 10-cent hike in minimum wage that goes into effect Jan. 1 will allow Oregon to keep pace with the cost of living, but it will do little to help either workers or small businesses get a leg up in the flat-lined economy, local residents and business owners say.

Minimum wage will increase to $8.50 per hour, as required by the inflation-indexed wage standard voted into law in 2002. It reflects a 1.15 percent upward creep in the Consumer Price Index since August last year, according to state Labor Commissioner Brad Avakian.

Oregon has the second-highest minimum wage in the nation, behind Washington state's $8.55 per hour. Federal minimum wage is $7.25 per hour.

"The increase will have a fairly small impact," said economist Guy Tauer of the state Employment Department in Medford. "It raises the pay of 121,000 payroll workers and helps them keep up with inflation. It increases the cost of doing business, but also allows workers to spend money in those businesses that are impacted."

Filling tanks at Astro gas station in Ashland Thursday, Donald Campagna said: "It's always good to get more money. I didn't know it was happening. Sometimes I get in a pinch, so this will help."

"I'm happy for people on minimum wage — but it would be nice if it went up a dollar," said Allison Lockett of Pangea Grills & Wraps in Ashland.

Though it may help workers, John Trapp of Geppetto's Restaurant in Ashland said the minimum wage increase "hurts small business in this struggling economy and has a true effect on our bottom line."

Oregon's high minimum wage is "unfair" to restaurants, where employees also earn tips, said Trapp, noting that in most of the country, employers are allowed to pay less than minimum wage if workers get tips.

Rich Rohde, of Oregon Action, said the dime-an-hour hike is "only an attempt to keep up with inflation and those adjustments never affect the job outlook in Southern Oregon."

"It's a tiny, baby Christmas present for low-wage workers. It can make some difference — and it doesn't hurt Oregon businesses that care about their workers."

Evo's Coffee Lounge owner Don Gomes agreed, noting, "The increase isn't going to make or break me. I always pay employees above the minimum and figure if I take care of them, they're going to take care of the business."

Rep. Dennis Richardson, R-Central Point, bemoaned the hike.

"It adds an additional burden to employers, who are already making cuts and layoffs and closing doors," he said.

In response to news of an upturn in the economy, Richardson said the $2 trillion the federal government has dumped into the economy is "going to show up," but will not add to the recovery in the long term. Oregon has lost 160,000 jobs since 2007 (it normally gains 25,000 a year), so it'll take about six years to build back to that level, he said.

Rep. Peter Buckley, D-Ashland, said any boost to wages is a benefit to the economy and will complement the federal 2 percent reduction in payroll taxes.

"Oregon has gained 12,000 jobs in the last two months, so things are starting to turn around," Buckley said. "It's hit bottom and is starting to build back. I'm tremendously relieved it's headed in a positive direction now."

Trapp said he saw no signs of the economy gasping back to life, adding, "You walk around town and you won't see a lot of people out there."

Gomes, who bought Evo's in September and previously owned a convenience store, said it's hard to spot a recession or recovery because, in these businesses, "what you see is that people will not deprive themselves of three things — beer, cigarettes and coffee."

Oregon is one of 10 states that annually adjusts the minimum wage based on inflation and the CPI. The others are Washington, Vermont, Ohio, Nevada, Montana, Missouri, Florida, Colorado and Arizona.

The CPI, which is published by the U.S. Bureau of Labor Statistics, is a measure of the average change in prices over time in a fixed "market basket" of goods and services, such as food, shelter, medical care, transportation fares and other goods and services people purchase for day-to-day living.

"It is critical," Avakian said in a news release, "with our economy still straining to regain its momentum, that Oregon's lowest wage earners not lose ground by falling behind inflation. At the same time, this modest increase will not shock businesses in a way that hurts the economic recovery."

John Darling is a freelance writer living in Ashland. E-mail him at jdarling@jeffnet.org.