Is Inflation a Conspiracy to Pay Minimum Wage Employees Less?

The main reason inflation isn’t a conspiracy to roll back minimum wage gains is that there’s actually an inflation adjustment built into the law.

What’s the point of spending decades fighting for a livable minimum wage if inflation is going to wipe out all your gains in one year? Is inflation just a conspiracy between the powers that be to effectively pay minimum wage employees less? —Chairman Meow

Ha! If only the powers that be had their act together well enough to organize a successful conspiracy. If there’s one thing I wish I could convey to QAnon types, it’s that the people in charge are just as stupid and disorganized as everybody else. Remember, kids: Not only is there no conspiracy, there isn’t even a plan.

I get why you’re suspicious, though: Inflation certainly seems like it could benefit the Walmarts of the world at the expense of low-paid workers. But things aren’t as nefarious as they seem.

When Oregon’s minimum wage law passed, in spring 2016, our minimum wage was $9.25. In July 2022, after the last of seven statutorily specified pay raises, the figure was $14.75. No wonder The Man is out to get us—we made him give us a 59% raise!

Well, not quite. Don’t forget, inflation has been plugging along this whole time, albeit at a lower level than now. When you factor that in, the total raise is only 29%. It’s going in the right direction, but it’s not quite the “shake Jeff Bezos by the heels and catch the money in a bucket” move that would really drive the billionaire class to declare war.

However, the main reason inflation isn’t a conspiracy to roll back minimum wage gains is that there’s actually an inflation adjustment built into the law. You may not have paid much attention because at the super-low rate of inflation we used to think would last forever, that adjustment would have been a very boring 20 cents or so.

Suddenly, though, things are getting interesting. The adjustment will be based on the increase in the Consumer Price Index between March 2022 and March 2023. If that holds at the current level of 8.2%, Portland’s minimum wage will rise to $15.85 on July 1, 2023, smashing through the meaningless but psychologically important $15-an-hour mark. Take that, The Man!

Questions? Send them to dr.know@wweek.com.