Brendan Hartigen brings dirty dishes into the kitchen at The Last Steep Bar & Grill on Elk Avenue in Crested Butte on Aug. 6, 2019. Sean buses tables and does whatever other tasks are given to him. (Dean Krakel, Special to The Colorado Sun)
The minimum wage in Colorado and a few local governments is going up again Jan. 1.
The raising of the minimum wage has been an annual event for the state and the city of Denver for years and, starting this year, Edgewater and Boulder County joined in. That’s because all are tied to the change in the Consumer Price Index, also known as inflation. Denver’srate will jump 52 cents next year to $18.81 an hour, up from the current $18.29. Colorado’s is tentatively increasing 39 cents to $14.81, from $14.42.The state’s official new wage will be announced around Labor Day, according to state labor department officials. Edgewater ison trackto raise its minimum to wage to $16.52, from $15.02 this year. Boulder County will increase to $16.57, from the current $15.69.
It wasn’t always this way. In 2006, the minimum wage was the same in Denver, Colorado and the U.S. That changed in 2007 after Colorado voters passed an amendment to boost the minimum and peg it to increases in the CPI (there’s no change if CPI decreases). Then in 2019, Denverites voted to break away from the state and set a higher minimum. The federal minimum, meanwhile, hasn’t increased since 2010. It’s still $7.25 per hour. But not all Colorado minimum wages are rising at an equal rate. That’s because Colorado usesCPI-U for urban consumers, which was up 2.7%. Denver usesCPI-W for wage earners, which increased 2.84%. The calculation is based on the first half of the year compared to the year-ago index.
And because Boulder County and Edgewater just adopted the local wage, they’re still trying to raise it a little faster than the state before the annual increase kicks in based on inflation. Edgewater’s rate will increase 10%, the most of the four in 2025, because the city is aiming to get to $21.99 by 2029. That still puts the city’s minimum wage lower than Denver’s, which is “just across Sheridan Boulevard,” City Manager Dan Maples said in an email . It hasn’t been a full year with the new wage, but Maples said he hasn’t heard any pushback from the business community so far. “ We did hear that the legislation helped corporate-owned businesses pay higher wages. One corporate business told us that they are required to pay the minimum and if the minimum is the state, that’s what is paid. With our local minimum the organization now had to pay the higher rate. The company we talked with about this was very appreciative as they said it helped that store be more competitive in the area,” Maples said.
Behind the annual increases
Local governments were allowed to enact their own minimum wage starting in 2020, afterHouse Bill 1210passed in 2019, though the law limited it to no more than 33 local governments, or 10% of local governments.
Denver jumped on board immediately and had its ordinance ready to go in 2020, the first year of a city minimum wage, said Robin Kniech, an at-large Denver city council member at the time who had also advocated for the state to allow it. She’s now a fellow at Bell Policy Center working on affordable housing.“Of course, (we didn’t know) a pandemic was coming but we’d had a long period of economic growth,” Kniech said. “Evidence was very clear. I still have the PowerPoint that shows the line of how housing prices have increased and how wages have stagnated.”
The intention was also to address the wage inequality for women and racial minorities who were some of the lowest earners, according to the Economic Policy Institute, she said. And the Denver City Council chose to align annual increases with CPI “because what we know from federal research is that when you fail to keep up with the cost of living, wages erode over time. That’s a best practice nationally.” Many business organizations came out against minimum wage increases when the state broached the topic as well as the city of Denver. Carly West, vice president of policy for the Denver Chamber of Commerce acknowledged that the city’s intention was to “improve workers’ livelihoods,” but it’s the broader impact on smaller businesses that has taken a toll. “We have heard from members who are small business owners who have had to cut hours and reduce staff due to the financial strain of keeping up with wage increases,” West said in an email. “We have previously stated that the primary driver of the cost of living challenges in Colorado is the housing market. … Addressing housing affordability through increased housing supply and construction litigation reform is crucial to creating a more balanced approach to improving economic conditions for workers while sustaining local businesses.”
Tipped minimum wages are also increasing
It’s been especially painful for Denver-area restaurants. Restaurants statewide can pay tipped workers less than minimum wage, but only up to $3.02 less per hour. In Denver, that puts the tipped workers at $15.27 an hour, excluding tips. Because of CPI, the tipped wage will rise to $15.79 next year. Since 2019 to today, the city’s tipped minimum wage has increased 89%, compared with the city’s minimum wage, which is up 64.8% in the same five-year period. “I feel like all the people making decisions on our behalf, they have no clue. They may come from a good place and they think they are helping employees, but at the end of the day, if they hurt the business, they hurt employees,” said Dana Rodriguez, an award winning chef in Denver who closed her first solo venture, Cantina Loca, in April. “The minimum wage is killing our businesses. Like, literally, that’s one of the reasons why I closed one of my restaurants. It hurts a lot.”
The Colorado Restaurant Association opposed Denver’s measure because of the impacton the tipped minimum wage. Tipped workers make more money in general because of tips. But the kitchen crew and other nontipped employees who don’t serve customers directly can’t share in any sort of tip pool unless everyone is paid at least the minimum wage.
The Colorado labor department released a report last year about theeconomic impact of the higher minimum wage. While the study pointed out that Denver’s sales tax revenues and unemployment rates “did not suffer relative to other parts of the state” immediately after going into effect. But then the pandemic disruptions began and Denver’s economy was hit harder because of COVID-19. However, despite suffering greater impact during the pandemic, the “city’s sales tax revenues at restaurants and bars increased” at a faster rate than the state and comparable cities and counties. Earnings also rose faster than the rest of the state.
More locals considering their own wage
Other local governments are still considering their own wage as well. A regional group that includes the cities of Boulder, Louisville, Longmont, Lafayette and Erie combined efforts to do an economic analysis for the region and by city. Presentations to city officials are planned for August and September, according to the cities. Boulder City Council will hear an economic presentation reporton Aug. 22, said Lauren Folkerts, a council member who’s been involved with the regional effort.
“Around Colorado, we’ve seen cost of living increases have been pretty significant and the minimum wage is one of many tools we have to make it easier for people to make ends meet in our community,” Folkerts said. “It’s definitely not the only thing but it’s important for us to be looking at it. We’ve seen our food bank usage increase dramatically since prior to the pandemic. The rates of kids in the Boulder Valley School District system that experience homelessness in the school year is higher than it’s been in a long time. This is really about making it more affordable for people in our community.”
Article by The Colorado Sun
# # #
