Colorado Will Lower Their Minimum Wage
Colorado making historic minimum wage changes
For the first time in decades a state’s minimum wage is decreasing. Beginning in January of 2010, Colorado will be decreasing it’s minimum wage by 3 cents per hour, to $ 7.25 per hour. This is the first decrease in any state’s minimum rate since 1938, the year it was introduced. The decrease is because Colorado is one of the ten states that peg their minimum wage to the rate of inflation. The goal is for minimum wage to keep pace cost of living. The consumer price index of the state declined by 0.6% in 2009 and that calls for the change in minimum wage.
Three cents can add up
The consumer price index for the state of Colorado was changed by lowered fuel prices. The dip is minimal in Colorado – only 3 cents – but if you make a low hourly wage, and trying to make it on what little you get, 3 cents adds up. Denver based house painter Gary Foeller said, “Yeah—it’s only 3 cents an hour, but that 3 cents an hour adds up at the end of 12 months.” The difference of three cents adds up to around $ 62 per year for a full time worker. The change won’t have an effect on workers who combine hourly wages and tips like waiters, bartenders and waitresses.
The government’s response
Most Colorado officials state that though there is a change in legislation due to the consumer price index, many businesses most likely won’t be decreasing minimum wage. Though there are no official studies to substantiate the claim, Char Haavind, spokesman for the Colorado Department of Labor and Employment said, “We anticipate most employers will keep paying their current wage.” Throughout the state about 4% of the workers are hourly.
Employers weigh in
Despite the federal minimum wage being $ 7.25, many employers say it isn’t enough to keep workers around. An owner of a Dairy Queen franchise in Colorado, Mike Trinh, pays his workers $ 8 because he knows that if he pays less, he won’t be able to keep anyone on staff. He said, “You have to be competitive if you want them to stay on and do a good job.” The unemployment rate is not pushing people to work for minimum wage as readily as early research suggested. Rather, most people in need of work are taking lower paying jobs, but proactively looking. Trinh added, “If your wage is too low, there is no loyalty at all. The minute workers find a job offering a nickel or dime increase in pay, they leave.”
The one safeguard in minimum wage
The one safeguard in setting the minimum wage is that the federal minimum wage is $ 7.25 and because that is the floor, states can’t dip below it. Florida, Missouri, Nevada, Arizona, Oregon, Ohio, Vermont, and Washington all have minimum wages that are adjustable, and fix them to inflation. Thankfully, the minimum wage sets a wage floor. Florida’s consumer price index, for instance, is falling as well, but if the minimum wage were pegged to it, the minimum wage would become $ 7.21, which is lower than Federal standards. Despite the minimum requirement, it is still up for debate on how workers will be able to manage. Foeller added, “It is impossible to make it on minimum wage now. It’s $ 7.25 per hour. How can you survive on that?”