A ballot measure passed in 2002 mandates that the change be made to accommodate the rising cost of living, which went up 5.4 percent from last year. With the approval of Measure 25, Oregonians voted to increase the state's minimum wage from $6.50 to $6.90 per hour effective January 1, 2003, and to raise it annually each year thereafter to keep up with annual inflation.

The increase means an extra $936 a year for one full-time minimum wage worker.

But the pay raise that Oregon's minimum wage earners will get next year may not be enough to make up for the rise in prices at the supermarket or the pump, cautioned Oregon Center for Public Policy analyst Michael Leachman.

Many officials in 2002 worried that the measure would also result in negative consequences in the agricultural and restaurant industries where many of the workers earn minimum wage.  According to Leachman, from 2002 through this year the number of restaurant jobs in Oregon has grown by nearly 21 percent -- more than double the state's overall non-farm job growth rate. Similarly, Oregon's net farm income nearly tripled from 2002 through 2007, easily outpacing national growth in farm profits over the same period, said Leachman.

"Oregon's cost-of-living adjustments to the minimum wage continue to be good for low-wage workers and good for Oregon," said Leachman.

Although the rising cost of living is leaving Oregon's minimum wage earners in a bind, the pay increase will raise minimum wage to the second highest in the nation, behind only Oregon's neighbors to the north, Washington state.