U.S. minimum wage increase hits $6.55 an hour; it's $7.02 in Colorado

By Joanne Kelley, Rocky Mountain News (Contact)

Published July 23, 2008 at 9:05 p.m.

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About 2 million of the nation's lowest-paid workers will see a modest pay hike today when the federal minimum wage goes up, but Colorado's $7.02 an hour already trumps it.

The increase of 70 cents in the U.S. minimum wage is the second of three and follows the passage of a law in 2007 that boosted it for the first time in a decade. It now stands at $6.55, up from $5.85 last year, but still falls 47 cents an hour short of the minimum that employers in Colorado must pay their workers.

That's because Colorado voters earlier backed a constitutional amendment that resulted in a higher hourly wage floor, plus annual increases tied to the local pace of inflation.

"We're more than likely looking at at least another 2.5 percent to 3 percent increase in Colorado's minimum wage in January," said Rich Jones, director of research at the Bell Policy Center. "At the extreme it could go up about 4 percent."

Rapidly increasing prices could boost the hourly increase as inflation rates rise, but that means the pay gains for workers likely will be consumed by the increase cost of living.

The state wage floor is calculated based on increases in the Denver-Boulder-Greeley Consumer Price Index.

The law requires that employers pay whichever wage is higher, national or state. Colorado is one of many states that has a higher level because it continues to go up as prices rise.

Current federal law stipulated that the U.S. minimum wage will go up once more - rising another 70 cents to $7.25 - on July 24, 2009. About 1.7 million workers will be affected by the minimum wage increase, according to the Labor Department's Bureau of Labor Statistics.

kelleyj@RockyMountainNews.com or 303-954-5068

Colorado beats U.S.

The state's voters tied minimum-wage increases to local inflation levels here when they passed a constitutional amendment in 2006. Here's how the state stacks up against the minimum federal level:

$7.02 The new hourly rate for Colorado starting Jan. 1, 2008, an increase from $6.85 a year earlier. It will go up again by about 3 percent next January and every year after that depending on the Denver/Boulder/Greeley rate of inflation.

$6.55 The new federal minimum wage goes up by 70 cents today, the second of three increases under a law passed by Congress in 2007. The U.S. hourly floor will rise again next July 24 to $7.25.

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