DENVER – In the weeks ahead of the Nov. 8 General Election, Denver7 will be profiling most of the state ballot measures and initiatives. In this edition, we take a look at Amendment 70, better known as the statewide minimum wage increase.
Here are 7 things you need to know about Amendment 70:
1. CURRENT MINIMUM WAGE RULES AND THEIR HISTORY IN COLORADO
State law mandates tipped workers make $3.02 less than the state minimum wage, and by 2020, the tipped worker minimum wage would rise to $8.98 per hour.
Currently, the Colorado minimum wage is set at $8.31 per hour for most workers and $5.29 per hour for tipped workers.
Voters approved a $6.85 per hour minimum wage in 2006 that included a provision that it be adjusted yearly in comparison to movement in the state’s consumer price index (CPI) – which measures the changes in prices of the statewide prices of goods and services each year.
The wage was increased to $6.85 per hour from $5.15 per hour. It has since gone up every year, except for in 2010, when it dropped by 4 cents an hour.
The current federal minimum wage is set at $7.25 per hour for non-tipped workers and $2.13 per hour for tipped workers.
State law forbids cities from setting a higher minimum wage than the state’s.
Starting in 2021, the minimum wage would again be tied back to the CPI, though Amendment 70 would change the constitution to prevent a decrease in the minimum wage if the cost of living falls.
For non-tipped workers, who comprise most of Colorado’s workforce, the minimum wage will rise incrementally over the next three-plus years:
2016: $8.31 per hour
2017: $9.30 per hour
2018: $10.20 per hour
2019: $11.10 per hour
2020: $12 per hour
Under current rules, a recent economic forecast projects the minimum wage to be around $9.18 per hour in 2020 if the amendment is not approved.
3.WHAT AMENDMENT 70 DOES FOR TIPPED WORKERS
For tipped workers, the rules get a little more complicated. Tipped wages will remain at $3.02 less than the wage for tipped workers, which put the wage at the following stages as it increases each year:
2016: $5.29 per hour
2017: $6.28 per hour
2018: $7.18 per hour
2019: $8.08 per hour
2020: $8.98 per hour
The same economic forecast projects the tipped minimum wage to be $6.16 per hour in 2020 if Amendment 70 isn’t approved.
4. ARGUMENTS FOR MINIMUM WAGE INCREASE
The primary argument in favor of raising the state’s minimum wage is it is currently too low to provide minimum wage workers with enough money to afford a normal standard of living.
Many people living on minimum wage, which amounts to around $300 a week after taxes, are forced to rely on at least one form of state or federal public assistance, whether it be food stamps or federal health care assistance.
Coupled with large cost-of-living increases in Colorado’s largest metro areas, the current minimum wage is far below what is necessary for people living in Denver and Boulder, as well as in several other larger metropolitan areas.
Since the 2007 minimum wage hike, the CPI has increased the wage by 21 percent, compared to a 37 percent rise in Denver’s housing prices in the same period, for instance.
Another argument in favor of raising the minimum wage is studies have shown that in many cities and companies, higher wages have translated to increased productivity, lower turnover and fewer disciplinary issues.
A September report from the University of Denver and Colorado Women’s College, in collaboration with The Women’s Foundation of Colorado, says the state’s gross domestic product (GDP) would increase by $400 million and 20 percent of Coloradans would see household income increases.
The study, which looked at economic and social factors in the state, find around 290,000 women would see their income rise, as would 200,000 households with children.
“Contrary to other reports, our research shows that the proposed increase to the Colorado minimum wage will increase consumer spending, thereby strengthening the economy and likely driving job growth, not job loss,” said one of the co-authors of the report, Jack Straus, the Chair of Applied Economics at DU’s business school.
A Pew Research study released in April noted Colorado had the 12th-highest disparity in the nation between the state’s lowest and highest costs of living.
He had said in an interview with Denver7 two weeks earlier that he was on the fence about whether or not he’d support the measure, pointing to concerns about creating a blanket minimum wage that would also cover small-town farmers and ranchers. At the time, he said he was “sympathetic” to the amendment, but said he would have preferred a geographic exemption for lower-income counties be put in place.
The measure has also been supported by U.S. Labor Secretary Tom Perez, the Boulder City Council, state Sen. Leroy Garcia Jr., state Rep. Daneya Esgar, and a vast array of state organizations and unions, including the American Federation of Teachers and the Denver Area Labor Federation.
The Colorado Springs Independent’s editorial board supported the measure.
5. ARGUMENTS AGAINST MINIMUM WAGE INCREASE
But on the contrary, one of the most widespread arguments against raising the minimum wage comes from small business owners, who worry that having to pay higher wages will hurt their bottom line and the number of employees they can pay.
Small businesses could suffer the most in small and rural communities that haven’t seen the economic recovery from the Great Recession so far seen in most of Colorado’s larger economies.
“Businesses in rural communities have a harder time absorbing increases in costs and may struggle to pay higher costs if the minimum wage increases, which may further distress the economy in rural Colorado,” the Colorado Blue Book voting guide says.
Minimum wage workers themselves have voiced concerns that they could lose their jobs or see fewer hours as businesses decide they can’t pay for as many minimum-wage workers.
Another concern is businesses and housing providers could raise rent and the price of food and other home goods relative to the wage increases in order to offset any losses they might suffer.
Much of the opposition has come from various chambers of commerce, hotel, bar and restaurant associations, and business development leagues who deal the most with minimum wage workers and tipped wage workers.
Rep. Clarice Navarro-Ratzlaff also opposes the bill, telling the Pueblo Chieftain the proposed amendment “sounds too good to be true.”
The editorial boards for the Aurora Sentinel, Colorado Springs Gazette, Denver Post, Longmont Times-Call and Greeley Tribune have all come out in opposition to the measure – many pointing to what they say are expected job losses.
A report from Economics International Corporation says Colorado’s unemployment could go down by up to 90,000 people and reduce wages paid out by up to $3.9 billion once the program is fully implemented.
6. MONEY FLOODS IN FOR, AGAINST MEASURE
The chief political action committee supporting Amendment 70, Colorado Families for a Fair Wage, has out-raised the primary opposition PAC, Keep Colorado Working, by more than double.
The Palo Alto, California-based Fairness Project contributed the largest amount to the PAC, $400,000, on Oct. 11. It has so far contributed more than $900,000 to the committee.
The next-largest single donations of $300,000 came from three companies: Brooklyn-based Center For Popular Democracy Action Fund, the New York-based Civic Participation Action Fund, and Vista, California-based Dr. Bronner’s Magic Soaps. All three of those contributions have come in since Sept. 12.
Denver-based Together Colorado Action gave the largest state-based contribution to Colorado Families for a Fair Wage, when it gave $70,000 on April 7.
Most of its spending has also gone to advertising and consulting, mostly with Fairfax, Virginia-based Screen Strategies and Washington, D.C.-based Fieldworks, LLC.
7. COLORADO POLLS SHOW SUPPORT FOR MEASURE
There have so far been two statewide polls on Amendment 70: one conducted by Colorado Mesa University, Rocky Mountain PBS and Franklin & Marshal College in mid-September and a Magellan Strategies poll conducted at the end of August.
The Magellan Strategies poll asked 500 likely voters on land lines and cell phones about the measure, and has a 4.4 percent margin of error. The poll found 55 percent of people polled supported Amendment 70, 42 percent opposed it and 3 percent were undecided.