State minimum wage to increase
Inflation report means pay will rise because of provision in constitution
By David Milstead, Rocky Mountain News (Contact)
Published August 14, 2008 at 12:12 p.m.
The Denver-area inflation rate for the first half of the year was 3.7 percent, propelled by rising energy costs.
It's not just another economic statistic: Thanks to a 2006 ballot issue, Colorado uses the measure to set the state's minimum wage.
Now $7.02, the minimum wage will increase Jan. 1 to $7.28, the Rocky Mountain News calculates, based on the Colorado Department of Labor's rules.
Tipped employees, like restaurant wait staff, will see their minimum rise from $4 to $4.26.
Bill Thoennes, a spokesman for the Colorado Department of Labor, said the agency must consult with federal economists and conduct a rules hearing before formally announcing the change, but the math is correct.
The local inflation rate is the Denver-Boulder-Greeley Consumer Price Index, which measures price increases from the first half of 2007 to the first half of 2008.
The federal Bureau of Labor Statistics, which calculates the rate, said energy prices, which include prices for vehicles and heating and cooling the home, rose 19 percent. In the prior year, energy costs actually declined 0.6 percent.
Take out the massive jump in energy costs and the CPI for Denver rose 2.6 percent, the bureau said.
In the first half of 2007, inflation was 2.5 percent, down from 3.8 percent in the first half of 2006.
The CPI increase means another round of cost increases for businesses, particularly for restaurants. Because the wage for tipped employees is calculated by subtracting $3.02 from the primary minimum wage, the new $4.26 figure is a 6.5 percent increase from the current $4.
Coloradans in 2006 voted by a small margin to create a state minimum wage of $6.85, significantly higher than the federal minimum at the time of $5.15. The measure went into the Colorado Constitution with automatic increases each year pegged to the Denver-Boulder-Greeley CPI.
Advocates pointed to years of inaction from both the federal government and the state legislature in increasing the minimum, which had been eroded by inflation.
If the federal government had put automatic, inflation-based increases in place in 1978, the national minimum wage would have been $8.54 in 2006, according to a Rocky analysis of federal wage and inflation data at the time.
After its latest adjustment July 24, the federal minimum wage stands at $6.55 an hour. It's scheduled to rise to $7.25 an hour on July 24 of next year.
Thursday's news on inflation prompted the two sides of the Colorado constitutional change to reiterate their views.
"Small business was vilified for opposing putting it into the constitution," said Tony Gagliardi, Colorado director of the National Federation of Independent Business. "We were not against the minimum wage hike. We were opposed to putting it in the constitution and indexing it."
"Our prediction is holding true," Gagliardi said. "This will continue to make it harder for low-skilled and entry-level workers to join the work force."
Rich Jones of the Bell Policy Center, an advocate for the amendment, said, "If we don't adjust it for inflation, these folks fall backward."
"This ensures low-wage workers' wages will keep pace with the cost of living in Colorado - fuel, food, rents, etc."
Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.
More moolah Effect of amendment passed by voters in 2006:
Minimum wage in Colorado
2006: $5.15
2007: $6.85
2008: $7.02
2009: $7.28*
Tipped employees:
2006: $2.13
2007: $3.83
2008: $4.00
2009: $4.26*
*Rocky Mountain News estimate based on Denver-Boulder-Greeley Consumer Price Index released Thursday by the Bureau of Labor Statistics.
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August 14, 2008
1:37 p.m.
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tjpatriot writes:
Minimum wage is directly related to teenage unemployment. So, expect to see more unemployed teenagers.
Nice job voters.
August 14, 2008
2:04 p.m.
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ajcole22 writes:
The result of illegal immigration is a swelling of unskilled labor, which in turns puts downward pressure on the wages of the lowest earners. As long as this continues it will be difficult for those lowest wage earners to survive. Without reform to decrease the rate of illegal immigration a price floor on unskilled labor seems to be ok. I generally believe in the market; however I also believe it is in the best interest of United States to have a minimum wage that is high enough so that if a person worked 40 hours a week they would make enough to NOT qualify for government assistance. Our society doesn't like to see its citizens starving, so we care for these low wage earners anyway. Why not have them (low wage earners) work for it (enough money to get by) and get paid directly, instead of taxing other citizens and then moving the money around a government bureaucracy before finally reaching those less fortunate.
Now, I think a better solution would be to seal the border, shrink the supply of unskilled labor and the market would take care of the rest. And to those who say Americans won't do those jobs, I say "only at those low wages." And if a business can only survive by paying people wages that low, maybe our society doesn't need that business. All work is noble, no matter if you are a janitor or a CEO. (of course they shouldn't be paid the same, anyone can clean a toilet, only a few can wreck companies and screw up economies :-)
by the way, I am not anti immigration, I think immigrants make the best Americans. I just think it should be done legally. period.
August 14, 2008
2:04 p.m.
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jbartholomew42 writes:
So, let me see if I can get this right. Because of inflation, minimum wages are raised. Then the price of a product is increased, causing inflation to rise again. This then causes minimum wages to rise again, causing the price of a product to rise again, causing inflation to rise again, causing minimum wages to rise again....................................................
August 14, 2008
2:37 p.m.
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Keith43 writes:
MarineGrunt,
You call Big_D a "Big_Dumbo", and your man is Obama? You don't know diddly squat about him. You're the Dumbo!! I suggest you bleeding heart liberal, that you do a little research. Perhaps if you do, there's hope for you. And no, I'm no longer a republican. King Bush is a bigger loser than Obama and Bush combined.
August 14, 2008
2:38 p.m.
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davies writes:
Colorado's mistake isn't that bad yet. Colorado will go to $7.28 in January while the federal rate will go to $7.25 in July. The job market for teenagers and entry-level people will tighten up, but at least it will be across the country, not just here.
But when Colorado's rate does rise to become significantly higher than the federal rate, the state will lose business. When businesses with low-paid employees leave (or don't come in the first place), their employees will not be around to spend their money here either. Ergo less revenue for other businesses here.
Minimum wage: a perfect example of liberals showing their 'compassion', as long as they can do it with someone else's money. Unintended consequences are for others to worry about.
August 14, 2008
2:50 p.m.
Suggest removal
Keith43 writes:
MarineGrunt,
Are you in favor of the "unconstitutional" Federal Reserve; which, by the way isn't a federal reserve at all. One, it has no reserves. Two, it's owned and run by the world banks - the elites. Based upon your slant, I'd bet you were all for bailing out FannyMae and FreddyMac and 400K bad mortgages, right? As a socialist liberal, you're all for simply printing more fiat money; which, if you really knew your economics, you'd know it's simply like taking an aspirin to take away the symptoms, drives up inflation and continues to devalue the dollar. If Israel or the U.S. goes into Iran, you can beat, the price of oil and gas at the pumps, will double. Then our economy and the economy of the world will go into the tank. And, that's what the elites want. So all mighty judge, what say you?
August 14, 2008
2:52 p.m.
Suggest removal
coloradovet writes:
What if the hourly wage was say $2 or $3 an hour? Sure, we'd have a lot more businesses and if the wage went up they'd go out too. But does that make $2 or $3 dollars an hour right?
August 14, 2008
3:38 p.m.
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Keith43 writes:
Marine,
The minimum wage and the anticipated increase is nothing more than another appeasement - like the stimulus rebate, a diversion to keep the hook in our mouths so we'll feel good about these crooks who are systematically stealing from us and destroying our economy. Yes, a wage increase is OK and may be passed due. But, the minimum wage is "noise level" stuff. That's why I brought up the example of Iran. Our economy is in such trouble, all it would take is some major catastrophic event, and it's over.
Perhaps I see a much broader agenda behind all this than you do. In my opinion, virtually all elected officials in DC are traitors to our country. As you may suppose, I'm pretty upset with the direction their taking us. And the sad thing is, most of America is either asleep or believes we can trust the government to "take care of us".
I apologize for not explaining why I deviated from the specifics of the article and for coming on so strongly. I believe at some level that you are probably in agreement with my assessment. I feel we must get the word out to all whom will listen. In my opinion, the seriousness of our overall economic condition and our relationship and circumstances around the world, make for a pretty volitile situation; and, makes the minimum wage, totally irrelavent.
Again Marine, my apologies!
August 14, 2008
3:39 p.m.
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Fisherman writes:
jbarth.......,
I couldn't have said it better myself. I have a better idea. Why don't we simply force businesses to pay all their employees at least, oh, let's say $25-35 an hour, so we stop with these piddly little raises because of inflation. Just do it all at once. That wage is way above average and it will make all those employees very happy........until they find themselves out of work. What a dumb thing the voters of Colorado passed.
August 14, 2008
3:48 p.m.
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davies writes:
coloradovet writes:
"What if the hourly wage was say $2 or $3 an hour? Sure, we'd have a lot more businesses and if the wage went up they'd go out too. But does that make $2 or $3 dollars an hour right?"
Why not let the businesses try it and see? No one will work for a business at those rates. Even babysitters expect more than that.
So, is $7.25 an hour "right" for everyone? If not, then what makes it the right minimum hourly rate for everyone? People's skills and the demands of different job duties vary.
August 14, 2008
4:01 p.m.
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tjpatriot writes:
30 years ago you didn't have to cut your own grass, pump your gas, or even clean your own house if you didn't want to. The minimum wage has ruined that for most of us, thereby lowering the standard of living by a couple of degrees. It was mostly done by teenagers, or any others willing to work for that. That opportunity has been long gone for a while.
I don't know if China has a minimum wage or not, but if they do it's probably a dollar. Workers Comp? Social Security? Employee Health Insurance? Environmental and other overbearing regs? I don't think so.
Now, if we can only figure out why all of our manufacturing is going over there...
August 14, 2008
4:06 p.m.
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coloradovet writes:
Bottom line is that the minimum wage is what separates America and other First World Countries from third world countries like Singapore and Sri Lanka. God Bless America! All the rest of you can go to Mexico!
August 14, 2008
4:10 p.m.
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coloradovet writes:
tjpatriot, I'm going to have to slam dunk you:
"The purchasing power of the current $5.15 per hour minimum wage is well below that of the 1960s and 1970s (30 years ago). From its peak in 1968, the purchasing power of the
minimium wage has declined over 36%."
During most of the 1960s and 1970s, working at the
minimum wage kept a family of three out of poverty.
Today such a family is 24% below the poverty level.
August 14, 2008
4:11 p.m.
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Hussie writes:
Frankly, I think it's about time Colorado stepped things up a bit...If they're going to support Utility Rate hikes, the working public should be afforded a wage increase...
Here's another thing to consider, Unions...
Out here in CA, the Hospitality Workers Union (Hotel Maids) sued the state for what they deemed a "Living Wage" (roughly $11.00 an hour) and won...Now mind you, many of these "workers" are ILLEGALS, operating on stolen identities, who have no right whatsoever to complain about "wages", but this Union backed them up...Believe me, I'd gladly clean guests rooms for $11.00 an hour, but I don't fit their hiring profile since I'm an American...
I have to agree with the poster that said we need to "Seal the borders", as it would indeed open up opportunities for Americans, and LEGAL immigrants...
August 14, 2008
4:15 p.m.
Suggest removal
coloradovet writes:
tjpatriot, some more (no wonder middle class familys 30 years ago could pay someone to mow their lawn):
Real weekly wages in the U.S. rose until 1973 (30 years ago), and have been declining since. From 1977 - 1989, the wealthiest 660,000 families gained 75% of "average pretax income" increases, while most middle income families saw only a 4% increase -- and those in the bottom 40% of income cohorts had real declines. The average annual earnings of the top group increased from $315,000 to $560,000 in twelve years. In 1990, the median income was $29,934; in 1973, it was $30,943 (constant dollars). Women in the workforce have helped to forestall lifestyle crashes due to this stagnant growth (Newman Declining 40, 42).
August 14, 2008
4:16 p.m.
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Keith43 writes:
Marine,
You're a gentleman! Thanks!
August 14, 2008
4:35 p.m.
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ColdShot writes:
The minimum wage was not designed to be a wage that will raise a family! Colorado blew this one for sure!
August 14, 2008
5:10 p.m.
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ElGordo writes:
Why is it easier for an illegal immigrant to find these "unskilled" jobs? I thought this being the land of opportunity everyone had the "opportunity" to be the best they can be. And by everyone I mean legal citizens. If you can't take advantage of what your country offers you, then don't cry when someone else does. Oh yeah I have been here illegally for 26 years.
August 14, 2008
5:28 p.m.
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tjpatriot writes:
I remember when my dad would pull into a "Service Station" (that's "Gas Station" to all you who weren't around then), the he'd get a "Yes Sir?". "Fill 'er up?", " Check your oil?", a thorough windshield cleaning was assumed, and he'd check you tires and under the hood if you wished. All that went away when the cost of labor made it ridiculous. It's not just wages, but all the other burdens business owners must bear. Let's face it, at some point it's cheaper to do without the extra employees. (Perhaps Obama will make it mandatory that they check your tire pressure.)
I used to cut a BIG lawn for $3 or $4. I have a very small lawn, and had a teenager come by wanting to cut it for $20. I said "no thanks, but good luck". It's something many of you libs don't seem to understand. You can legislate your bleeding heart all over the pavement, but if a manufacturer can make something for half price in China, he HAS to do it. Otherwise he is out of business. It's unfortunate, but sometimes reality bites.
So get all the great benefits lined-up. I'm sure all the unemployed people will really appreciate it.
August 14, 2008
7:15 p.m.
Suggest removal
Dannyar writes:
"They call Obama an elitist but they don’t think everyone has the right to get healthcare either."- Big_D
That's correct, Big_D. You don't have a 'right' to it, just as you don't have a 'right' to food and shelter.
You have an opportunity and an OBLIGATION to provide it for yourself.
August 14, 2008
7:38 p.m.
Suggest removal
davies writes:
coloradovet writes: "Bottom line is that the minimum wage is what separates America and other First World Countries from third world countries like Singapore and Sri Lanka. God Bless America! All the rest of you can go to Mexico!"
Gosh, all those other countries are pretty stupid for not just passing a minimum wage as high as America!
And then, coloradovet writes: "tjpatriot, I'm going to have to slam dunk you: "The purchasing power of the current $5.15 per hour minimum wage is well below that of the 1960s and 1970s (30 years ago). From its peak in 1968, the purchasing power of the
minimium wage has declined over 36%."
But CoVet, the article we are commenting on says that the current minimum wage is $6.55, and it will be $7.25 next July, which is uhh, let me see, 41% more than $5.15.
Besides which, those of us opposed to the minimum wage are not opposed to what amount it is now, was then, or someday will be; we're just opposed to the concept entirely. So we don't care if the current minimum wage has more or less purchasing power than it did at its peak in 1968.
PEOPLE SHOULD STRIVE TO OBTAIN SKILLS, PURSUE JOBS AND WORK HARD IN ORDER TO BE PAID WHAT THEY FEEL THEY ARE WORTH. THEY SHOULD NOT RELY ON THE GOVERNMENT TO SET A MINIMUM PAY RATE FOR THEM, REGARDLESS OF WHAT EFFORT THEY HAVE PUT FORTH.
Sorry for shouting.
August 14, 2008
7:52 p.m.
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Dannyar writes:
Well said, davies.
August 14, 2008
8:58 p.m.
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Brain writes:
A long time ago I worked for minumum wage, I don't recall exacly how much that was; but if I was still working for minimum wage I would need (government) help. Minimum wage is where a lot of us start; I didn't need the government to get a raise, in fact the raises I earned were better. Most of us (vast majority) don't need to wait for government to tell our employer to give us a raise.
August 14, 2008
9:12 p.m.
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Brain writes:
Marine; 8:58 is the first time I said anything on this thread??
"(So says the the one with a Brain!!!!)"
August 14, 2008
9:16 p.m.
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Brain writes:
Raise a family on minimum wage? You shouldn't be starting a family if you are at minimum wage; plan, prioritize!
Well said, davies
August 14, 2008
9:42 p.m.
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mmannino writes:
The left is trying to rewrite basic laws of economics again. These leftists are brilliant. Minimum wage laws cannot change the marginal value of labor. Some labor is not worth much for a variety of factors including the skills required and the industry competition level. If a minimum wage law increases the cost of labor above its value, negative side effects will occur including lower employment levels, business closings, and higher prices. I suspect that many restaurants are close to point of bankruptcy due to the highly competive nature of the industry, lower discretionary consumer spending, and increasing costs including labor and food costs. We will have fewer restaurants, fewer employed in this industry, and higher dining costs. Successful restaurants will seek more automation to decrease labor costs. I doubt that the left is concerned about any of these negative side effects. Those remaining in the industry will have to increase productivity (work harder) to compensate for fewer employees.
August 15, 2008
11:57 a.m.
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P_Denver writes:
Yes, China has minimum wages. Yes, they are quite low (they vary by province, same as ours vary by state). Yes, a single person can survive on them (rice is subsidized and is cheap).
No, a family cannot live on minimum wage. China had this weird idea that if you have a family you should get a better-paying job, or both spouses should work. Strange.
But because the Chinese wages are minimum-substance-level standard (no cable TV with premium channels, no car - use a bus, no house - just an apartment, no designer-label clothes) the individual worker can make toys, clothes, cars, and other gizmos much cheaper than we can here. That's why they "took" our jobs. We gave them away, because OUR minimum-wage philosophy DOES include trying to: feed a family, have premium cable TV, etc. etc.
The Chinese feel that if you do not have an education, you should not earn more than a bare minimum of money. You are not "entitled" to anything other than survival.
"Learn and earn" is a motto there. Why do you think Asian immigrants come here and blow us away in school?
Does it make sense now?
August 15, 2008
12:23 p.m.
Suggest removal
jay writes:
"the article we are commenting on says that the current minimum wage is $6.55, and it will be $7.25 next July, which is uhh, let me see, 41% more than $5.15."
not quite...here is the correct data from the article above:
"Now $7.02, the minimum wage will increase Jan. 1 to $7.28, the Rocky Mountain News calculates, based on the Colorado Department of Labor's rules"
"That's why they "took" our jobs."
i don't think you can make that case, p.
china and other countries are receiving american jobs (particularly mfg'ing) because companies can significantly reduce operating costs by doing business in countries that don't have their workers' best interests at heart...just like china.
until we work to homogonize labor laws and practices before giving the farm away with free trade agreements...america will continue to hemorrhage jobs to those places who don't protect their employees from corporations who would take advantage of their lenient labor landscape.
August 15, 2008
1:11 p.m.
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Dannyar writes:
"china and other countries are receiving american jobs (particularly mfg'ing) because companies can significantly reduce operating costs by doing business in countries that don't have their workers' best interests at heart...just like china."
Please explain how a country has its workers' best interests at heart.
What in the world does that mean?
August 15, 2008
1:11 p.m.
Suggest removal
P_Denver writes:
jay,
I put "took" in quotes because, like you, I don't believe they "took" anything. As I stated, we gave them away.
I'm not sure you can make the case that they don't have their worker's best interests at heart. After all, they are paying them a minimum wage to provide a minimum standard of living. I don't think that's heartless, just practical. Plus, most (including China) are improving their safety standards (slowly) and paying more attention to other socio-economic sustainability factors.
And ... good luck with getting all the various countries' labor laws into alignment. Remember: they don't like us, and they want to win --- and see us lose. If they have a strategic, economic advantage they will not willingly give it up.