The State of Oregon will be introducing a minimum wage increase unlike any other state, beginning July 1, 2016. This multi-tiered system will be divided into three geographical regions with corresponding wage rates and increase schedules.This involves an overall state increase, accompanied by an increase for the Portland Urban Growth Boundary (UGB) tier and two non-urban boundary tiers. The multi-level system addresses a couple of concerns economists have about raising minimum wages. Rural areas will struggle to handle a decrease in jobs that may arise from the increase in labor costs, and that the minimum wage should be adjusted for the cost of living. Oregon’s system is a new approach that attempts to avoid these potential consequences. Oregon’s current minimum wage is $9.25. The implementation plan for this system goes as follows:

DateBasePortland UGB (T1)Nonurban (T2)*Nonurban (T3)*
July 1, 2016$9.75$9.75$9.75$9.50
July 1, 2017$10.25$11.25$10.25$10.00
July 1, 2018$10.75$12.00$10.75$10.50
July 1, 2019$11.25$12.50$11.25$11.00
July 1, 2020$12.00$13.25$12.00$11.50
July 1, 2021$12.75$14.00$12.75$12.00
July 1, 2022$13.50$14.75$13.50$12.50
July 1, 2023CPI adjusted+$1.25=-$1.00

*Tier 2: Benton, Clackamas, Clatsop, Colombia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook, Wasco, Washington, and Yamhill counties
*Tier 3: Malheur, Lake, Harney, Wheeler, Sherman, Gilliam, Wallowa, Grant, Jefferson, Baker, Union, Crook, Klamath, Douglas, Coos, Curry, Umatilla, and Morrow counties

Governor Kate Brown, who has already announced she intends to sign the bill, stated that the new law “gives working families the much-needed wage boost they need, and addresses challenges for businesses and rural economies presented by the two impending ballot measures.” Moving forward, onlookers are anxious to see how this wage experiment will work. If this new system proves to be successful, Oregon could end up setting the tone for other states looking to implement large minimum wage increases.