Drop in Colorado minimum wage hurts the working poor
The working poor just can’t seem to get a break in Colorado.
On Jan. 1, this state became the first to decrease hourly wages for minimum-wage workers since the federal minimum wage law was adopted in 1938. The Colorado hourly rate for 2010 will drop three cents per hour from $7.28 to $7.25.
This automatic readjustment of the minimum wage is the result of the Colorado Minimum Wage Amendment (Amendment 42), passed in 2006. This citizen-initiated constitutional amendment provided for the minimum wage to be adjusted annually, based on the Consumer Price Index.
The purpose of Amendment 42 was to prevent stagnation of minimum wages due to rising inflation.
As one of 10 states that link the minimum wage to the Consumer Price Index, Colorado automatically raises the minimum wage as the cost of living goes up. However, unlike the other nine states, when the cost of living drops in Colorado, so does the minimum wage.
The Colorado CPI went down 0.6 percent in 2009, meaning the minimum wage should drop by four cents to $7.24. A penny an hour is saved for the workers because no state can pay less than the federal minimum wage of $7.25 per hour. There is no rule against paying more than the federal rate, as 13 states do.
The Colorado Department of Labor and Employment hopes most businesses won’t drop their employees’ wages. According to an Associated Press story, “State labor officials insist that few employers paying minimum wage will drop workers’ wages, though they had no figures or estimates” to support these claims.
Robin Kniech is program director for FRESC: Good Jobs, Strong Communities in Denver, one of the organizations that helped pass Amendment 42. He said, when the pending minimum-wage cut was first announced in last August, “This adjustment with inflation shows that Colorado’s minimum-wage amendment works as voters intended” to bring down the minimum wage as the consumer price index declined.
“But,” he added, “in the interests of keeping our economy moving and avoiding hardship to employees and their families, we urge employers not to lower wages.”
Only time will tell if employers heed these appeals, but in the meantime, some of the estimated 48,000 workers who could see their wages reduced do not share the optimism.
“Yeah, it’s 3 cents an hour. But that 3 cents an hour adds up at the end of 12 months,” one worker told a news reporter. Others said even this small amount, which could equal $62 per year or about $5 per month, would be felt by workers dependent on the minimum wage.
“It’s impossible to make it on minimum wage now,” one worker said. “How can you survive?” He hopes employers won’t drop wages, especially for adult workers.
With many workers forced into minimum-wage jobs by the recession, it is a particularly difficult time for even a small reduction in pay. “I’m just getting by now,” Denver worker Raul Ramierz told Kristen Wyatt of the Associated Press. “I work seven days a week. I can’t do any more.”
It is highly unlikely that the majority of Colorado voters who helped pass Amendment 42 expected that it might end up reducing the minimum wage. Nevertheless, it will not be easy to fix this flaw.
Passed as a constitutional amendment to ensure that politicians won’t tinker with a vote of the people, only another vote of the people can change it. Still, while that is very unlikely anytime soon, the Legislature might be able to act on its own to improve the economy of minimum wage workers.
In Alaska, the Legislature recently passed a law requiring the local minimum wage always to be 50 cents higher than the federal rate. A similar law in Colorado, which would not seem to conflict with Amendment 42, would raise the state minimum wage from its current $7.25 to $7.75.
That would make Colorado’s minimum wage equal to Alaska’s, but still well behind the $8 minimum in California, $8.40 in Washington state and Oregon’s $8.55.
Minimum-wage workers are resourceful and they are survivors. But their lives will be a little more secure if Colorado employers will keep their wages at 2009 levels. It is simply the right thing to do.