Colorado minimum wage drops along with cost of living

In an attempt to ensure that wages of low-income workers were kept in line with the cost of living, Coloradoans voted in 2006 to be one of 10 states (the others are Arizona, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington) that ties its minimum wage to inflation. However, due to a decrease in the inflation rate during the first half of 2009, the Centennial State will become the first to lower its current hourly minimum—from $7.28 to $7.24—on January 1, 2010. For tipped workers in Colorado, the minimum will go from $4.26 per hour to $4.22 per hour, an amount above the federal minimum for tipped income of $2.13 an hour.

The rate is recalibrated each year based on the Denver-Boulder-Greeley Consumer Price Index, which fell 0.6 percent between the first half of 2008 and the first half of 2009. Last year, that index rose 3.9 percent, but it is now on track to record its first annual decline since its start in 1965.

As reported in the New York Times, Rich Jones, director of policy and research at the Bell Policy Center, noted that voters had approved the change because the federal minimum wage had not risen for years and Colorado’s inflation rates had remained relatively steady.

For a full-time worker, going from $7.28 to the federal hourly minimum will result in a loss of $62.40 in income during the course of a year.

Noting that “it’s not a lot of money, but for the people who are working for minimum wage, it means lot to them,” Jones said he hoped employers would focus more on maintaining goodwill with their workers rather than lowering wages because they can.

The state Division of Labor will hold a public hearing on its minimum wage order at 9:30 a.m. November 6 at its offices, 633 17th St., Suite 200 in Denver. The division is also accepting comments until November 9.