What Happened When One Colorado Business Raised Their Starting Wages

Oct 26, 2016

Polar Bottle is a manufacturing company based out of Boulder, Colorado, focused on insulated, reusable water bottles made with sports-enthusiasts in mind.

 

It's an unlikely proving ground for Colorado's minimum wage debate. But in 2011, the company decided to do what state voters are now voting on. The company raised the starting minimum wage for their employees to $12 an hour. Now, they say they have learned a few lessons.

To get the politics out of the way, one of the owners of Polar Bottle, Judy Amabile, is totally on board with Amendment 70, which seeks to require minimum wages across the state be raised to $12 an hour by 2020. She's not alone: 250 other businesses across the state support the idea. Yet many other businesses and trade groups say the increase would hurt Colorado's economy.

 

 

Amabile and business partner Robert Heiberger decided to go beyond the debate and test the idea. They were inspired to look at their wage policy by "Nickel and Dimed: On (Not) Getting By in America" a book about how low-wage workers struggle by Barbara Ehrenreich.

“He came to work on Monday after that and said, ‘We have to make a change, because the amount of money we pay our people isn’t enough for them to get by on,’” Amabile says.

To decide how much they needed to increase wages, Amabile and Heiberger spoke with one of their own employees.

“We asked one of our production workers to help us figure out what did he think it would take for a single person to live in Boulder County and be able to get their basic needs met and he came up with $12 an hour," she says. "So we decided that needed to be our new starting pay.”

The decision wasn’t without its downsides for the company.

“We thought, ‘Oh, that’s going to be a big hit to the bottom line,’ but it seemed like the right thing to do,” says Amabile. “Because we’re privately owned we didn’t have any stockholders we had to answer to.”

Then came a surprise. The cost of production went down.

Amabile says that raising the minimum wage made for happier employees who felt as though they worked somewhere that cared about them.
Credit Addie Bash / Polar Bottle

“We attributed that to a dramatic reduction in turnover,” she says.

Polar Bottle saw a reduction in absenteeism, part of which Amabile credits to the benefit of employees having more money on hand: “Our people were able to get their cars fixed so they could get to work more easily.”

It didn’t hurt that her employees were happier to boot: “They were a lot more enthusiastic about the job,” she says, “and felt like they were a part of something - and that someone actually cared about them.”

On the issue of Amendment 70, Amabile’s support is informed by her own positive experience, but she remains realistic in her expectations for other businesses.

“I certainly don’t think that everyone will have the exact same experience that we have had,” she says. “I understand people’s concerns.”

However, Amabile says, these changes should be something all business owners expect regardless: “Businesses face uncertainty all the time.”

Amabile sees Amendment 70 as a cure for specific societal ills.

“If we don’t get at this giant income [inequality] that’s happening in our country, in the end that’s going to hurt everybody,” she says.

Beyond addressing income inequality, Amabile points to “discretionary income” as a boost to the local economy.

“You can also see the minute you start paying people more, they’re going to turn right around and spend that money in the local economy,” she notes. “That is going to help everybody.”