Amendment 70 proponents say the state’s minimum wage should be a living wage, while opponents say the market — not legislation — should decide.
The ballot question proposes amending the Colorado Constitution to increase the state minimum wage from $8.31 to $9.30 per hour beginning Jan. 1 and then increase the wage annually by $0.90 per hour beginning Jan. 1, 2018, until it reaches $12 per hour on Jan. 1, 2020. Every year after that, the minimum wage would be based on cost-of-living increases.
Proponents of the amendment have argued the state’s current minimum wage is too low to provide a basic standard of living for those workers who rely on that income alone.
Full-time workers making the minimum wage in Colorado earn approximately $17,285 annually, or about $300 per week after taxes, and many depend on public assistance.
“While the minimum wage has increased only 21 percent since 2007 (when the last voter-approved increase in the minimum wage went into effect), prices for basic necessities such as health care and housing have increased more steeply,” according to the 2016 Colorado ballot information booklet.
“For example, the overall average monthly rent price in the Denver metro area has increased about 37 percent, from approximately $946 in 2007 to about $1,292 in 2015.”
Debra Brown, campaign manager for the wage-increase advocacy group Colorado Business for Fair Minimum Wage, said raising the minimum wage could help businesses by improving employee productivity and morale and reducing turnover. And minimum wage increases often go right back into the economy, she said.
“When low wage workers get a bump in pay, they’re not starting a 401k or an offshore account,” Brown said. “They put it right back into the economy and Main Street.”
Brown also cited a University of Denver study projecting an economic boost of $400 million to the state’s economy.
“The minimum wage has the purchasing power of the 1960s,” Brown said. “You can’t raise a child anywhere in the state for $300 a week.”
More than 200 Colorado businesses have endorsed the amendment, as has Gov. John Hickenlooper.
Tracy duCharme, owner of small business Color Me Mine in Colorado Springs, said she supports the minimum wage increase.
“I support it because I think it will be good for my business,” she said. “It’s an economic stimulant, and I think it’s the right thing to do for workers.”
She employs nine people at her pottery-painting venue and while none of her employees make $12 an hour, she said they all make more than the current minimum wage.
But DuCharme said she doesn’t anticipate having to increase costs or cut hours to cover payroll.
“This isn’t a casual or frivolous issue,” she said. “Payroll is my biggest expense, like a lot of small businesses. But I think the increase in local spending will more than make up for the increase in wages.”
Additional supporters of the amendment include the Colorado Center on Law and Policy, the Colorado Coalition for the Homeless, Boulder City Council and Denver’s NAACP chapter.
According to the Colorado ballot information booklet, “Increasing the state minimum wage may actually hurt the very employees that the higher wage is meant to help.”
If Amendment 70 passes, some workers earning the minimum wage may face lay-offs, reduced hours or fewer benefits. Also, workers seeking minimum wage employment may find fewer opportunities. Businesses may also choose to raise prices to offset payroll increases.
The Colorado Springs Regional Business Alliance is one local organization that has taken a public stance against the proposed amendment.
Dirk Draper, CEO and president of the RBA, said one facet of the amendment alone should exclude it from consideration.
“It’s a constitutional amendment,” he said. “That’s not the right way to address this issue. This ties in with the RBA’s support of [Amendment 71] which makes the [state] constitution harder to amend. … This is about business practices and doesn’t belong in a founding document like the constitution.”
Even if it weren’t a constitutional amendment, Draper said the proposed law is bad for small businesses.
“This amounts to more than a 40 percent increase in labor costs, and those margins have to come from somewhere,” he said, adding the amendment would hit the Pikes Peak region particularly hard because of the large hospitality and tourism industry.
The Colorado Restaurant Association is another organization that has taken a stand against Amendment 70.
“Increasing salaries by 44-70 [percent] equals an additional $2.87 on an average $15 meal. If the owner makes only $0.61 on that meal, it doesn’t come close to covering the costs of the salary increases,” according to literature offered by the association. “If we knew how to increase income to offset this, we’d already be doing it. Prices can go up only so much before customers stop buying.”
The CRA goes on to say the amendment doesn’t make concessions for more rural areas in the state.
“One of the most draconian aspects of Amendment 70 is that it would make a small business in the San Luis Valley, the Western Slope or the Eastern Plains pay the same high wage structure to workers as it would for large and cash-rich businesses in communities like Boulder, Aspen, Cherry Hills and the high-end Denver suburbs,” association literature said.
Other ballot question opponents include the Denver Metro Chamber of Commerce, the National Federation of Independent Businesses, many of the state’s major newspapers and Colorado Springs Forward.
“This is the first step in an inflationary spiral,” Draper explained. “Raise the cost of doing business and businesses raise prices. Raise prices and you reduce the buying power for those this amendment is trying to support.”