Earlier this week, a grassroots committee dropped off 200,000 signatures — more than twice the amount needed to be on the ballot — with the state government. The goal: to raise the Colorado minimum wage to $12 by 2020.
The effort would increase the minimum wage from its current $8.31 by 90 cents every January until it reaches $12. After that, the minimum wage would increase with cost of living adjustments, organizers say.
Is it a good idea? Depends on whom you ask. Supporters say that increasing the minimum wage will be good for workers and won’t harm businesses. Opponents say 900,000 people could lose their jobs and businesses could close.
Colorado Families for a Fair Wage, the group spearheading the effort, says that it is “smart and fair” to raise the minimum wage.
“It’s fair because people working full-time should earn enough to support their families,” said Patty Kupfer, campaign manager for the group. “It’s smart because when working people have more money in their pockets, they spend it here in Colorado, boosting our economy and helping our communities thrive.”
Not so fast, opponents say, questioning nearly every point supporters make. In fact, some opponents believe the minimum wage should be eliminated completely.
“It’s bad public policy,” said Tony Gagliardi, director of the National Federation of Independent Businesses. “Government needs to get its nose out of the private sector. The minimum wage has never pulled anyone out of poverty, and it never will.”
– Increasing the minimum wage helps working families. The average minimum-wage earner is 35, the group said. More than 86 percent are older than 20.
– A full-time worker takes home less than $300 a week after taxes.
– In Colorado, a minimum wage worker must work on average 80 hours a week to afford a two-bedroom apartment.
– Research shows that making modest increases to the minimum wage results in more consumer spending.
– Each $1-an-hour increase creates a ripple effect in spending, generating $1.20 in the local economy.
– Women account for 48 percent of the labor force in Colorado, yet are 55 percent of workers making minimum wage.
– A report by the Center for Economic Policy Research examined the impact of minimum wage increases since 2000 and determined that there is little or no evidence of significant job loss from modest increases in the minimum wage.
– On average, a 10 percent increase in the minimum wage results in a less than 1 percent increase in restaurant prices. In most other low-wage industries, there is no detectable price increase.
– Surveys found that half (49 percent) of small businesses currently pay their lowest wage workers more than $12 per hour.
– Raising wages reduces costly employee turnover and increases productivity.
“Even though the minimum wage was created to help keep working families out of poverty, it hasn’t kept up with Colorado’s skyrocketing cost of living, leading to families forced to rely on public assistance and a less robust economy,” said Rich Jones, a member of the grassroots effort.
– The market should determine what the wage should be in any given locality. Small business owners should pay the prevailing wage in their community, instead of being tied to a minimum wage.
– Half of those earning minimum wage are between 16 and 24 — and six months after being hired, they have gotten a raise.
– Increasing minimum wages will put upward pressure on other employee salaries, mid-level managers and higher.
– The 44 percent increase in the minimum wage puts unfair profit pressure on small businesses, many of whom are operating on a 3 percent or 6 percent margin.
– Prices will go up if wages are increased.
– A study shows that job losses and reduced wages occur every time minimum wage levels are increased. At $12 an hour, the job market will see a 2 percent loss, according to the Economics International Corp. study for Common Sense Policy Roundtable.
– Teen employment drops 8.3 percent if minimum wages are $12. One in six working teens set aside at least half of their earnings to fund future education.
– Once fully phased-in, the hike would reduce total employment by 90,000 and teen employment by 10,500.
– The increases would reduce Colorado’s wages and salaries by $3.9 billion a year.
– It will harm those the legislation is trying to help. Low-skilled workers would face a bigger problem finding jobs.
“Low unemployment and a tight labor market is the surest route to income gains for most American households,” said a 2015 report from the Colorado Center on Law and Poverty. “And the benefits of a full employment economy accrue most significantly to historically disadvantaged groups.”