Oregon governor signs tiered minimum wage measure into law

PORTLAND, Ore. (Reuters) - Earnings for minimum-wage workers in Portland, Oregon will rise by $5.50 an hour over the next six years, with lesser increases set for smaller towns and rural areas under a first-of-its-kind measure signed into law on Wednesday by Oregon's governor.

Oregon has been in the vanguard of a growing number of U.S. states and cities that have moved in recent years to bolster the federal minimum wage, which has remained at $7.25 an hour since 2009.

The latest measure builds on a current Oregon wage floor that already stands at $9.25 an hour statewide under a law enacted in 2002.

Supporters say such measures are necessary to help low-paid workers who have been slipping into poverty due to stagnant earnings and rising living expenses. Opponents say raising the mandatory wage floor puts an undue strain on businesses still struggling to rebound from a prolonged U.S. economic slump.

The bill passed by Oregon's Democratic-led legislature and signed by Governor Kate Brown, also a Democrat, seeks to strike a balance by setting different pay tiers based on geography.

Starting July 1, the minimum wage for Oregon workers statewide will climb by 50 cents an hour, with graduated increases set at higher rates for the state's biggest city, Portland, as compared to smaller municipalities and rural communities where the cost of living is generally lower.

By 2022 under the new statute the hourly minimum wage will rise to $14.75 in Portland, to $13.50 in smaller cities and towns, and to $12.50 in rural areas.

"It means just an extra $15 or $20 a month starting in July, but for a mom of three just that small amount makes a big difference," Brown said in signing the measure. She said the gradual, differentiated pay hikes would ensure that "businesses have time to plan for the increase. That's the Oregon way."

U.S. Labor Secretary Thomas Perez hailed Oregon's approach, adjusting the wage floor according to regional economic differences, as a model for other states to follow until Congress passes a higher national minimum wage supported by President Barack Obama.

A Democratic-backed proposal to raise the federal minimum to $10.10 stalled on Capitol Hill in 2014. More recent proposals by some lawmakers call for a federal minimum wage of up to $15 an hour.

Oregon Republicans who opposed the increase predicted it would cost businesses in the state $1.2 billion.

(Editing by Steve Gorman and David Gregorio)