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Politics

The First Minimum Wage Bump In Colorado Hits January 2017

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Adam Croot
/
Flickr
Under Amendment 70, which was passed by voters in the Nov. 2016 election, the minimum wage will rise every year by 90 cents until it reaches $12 an hour in 2020.

Colorado workers who earn minimum wage will see more money in their paychecks starting in the New Year.

Beginning Jan. 1, 2017 the minimum wage will go up to $9.30 an hour, an increase of 99 cents. Under Amendment 70, which was passed by voters in the Nov. 2016 election, the minimum wage will rise every year by 90 cents until it reaches $12 an hour in 2020.

After 2020, it may rise based on inflation.

That’s because in 2006 voters approved adjusting Colorado’s minimum wage annually for inflation as measured by Colorado’s Consumer Price Index. But that has a couple of drawbacks. Regional price differences vary greatly -- it’s more expensive to live in Aspen than Johnstown -- but workers across the state are paid the same minimum wage. Inflation can also go down, meaning the minimum wage does as well. That happened in 2009. Inflation declined, and so did the minimum wage in 2010.

This constitutional amendment is an update, and would prevent a decrease in the minimum wage should the calculation drop. Another constitutional amendment would be required to lower the minimum wage if the economy stalls.

Those who supported Amendment 70 say a higher minimum wage helps workers on the bottom of the pay ladder keep pace with escalating living costs. But opponents have argued it doesn’t make allowances for small businesses especially in rural areas, where the economic recovery is slower.

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Credit screencap courtesy Colorado Department of Labor and Employment
In 2016, the state minimum wage was $8.31, while the federal minimum wage is $7.25.

Many also assert that people who work minimum wage jobs are high school or college students and a lower pay rate provides incentive for younger people to go to college. But is everyone who earns the minimum working their way up? It’s tough to answer that, said state economist Alexandra Hall. She can’t offer a demographic breakdown of who works minimum wage jobs in the state.

Part of the problem is that data on minimum wage workers is collected on a national level by the federal Bureau of Labor Statistics and it doesn’t include any Colorado-specific information.

“The sample size is small enough that you can’t produce a statistically valid estimate once you get down to the state level,” Hall said. “Think of the minimum wage as a floor. The market can drive it above the minimum wage, but it can’t drive it below.”

Minimum wage hikes proved to be popular across the country in the November 2016 election. Voters in Arizona, Maine and Washington also passed ballot measures that will raise the minimum wage significantly by 2020.

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