Can an Extra Dollar an Hour Improve Health?
DENVER – Last year, Coloradans voted to increase the state's minimum wage, up 99 cents to $9.30 an hour starting in January, and workers and businesses already are feeling the impact.
Advocates are hopeful it will lead to improved health outcomes, and say a raise is long overdue as the cost of living continues to rise.
But Daniel Gillilan, who owns a meat packing store with his wife on the Western Slope, sees things a little differently. He says many Coloradans just don't understand the true costs of operating a small business.
"The biggest changes are going to be less hours, especially overtime hours,” he states. “Not only that, the cost of our materials from our suppliers will go up, from the shipping end to the product end.”
Under the new law, the minimum wage will reach $12 an hour by 2020 and increase with inflation after that.
Proponents point to studies, including one by UCLA, that show higher wages can improve physical and mental health through better nutrition, more leisure time, physical activity, and reductions in risky behaviors such as smoking.
Nearly 500,000 Coloradans will see wage hikes with the new law, including 142,000 parents.
Jack Strauss, co-author of a University of Denver minimum wage study, agrees that it presents challenges for some small businesses, but he says the overall gains are clear.
"Our study shows, and what other economists have shown, for every person who loses a job there's at least 10 – sometimes up to 20 – times more people who gain from higher minimum wages," he points out.
While business groups frequently warn about job losses, Strauss notes that raising the wage floor is good for local economies, and especially for low-income workers.
"Every dollar they make, they plow it back into the community, which often then implies further, indirect job creation,” he states. “So, that's what you don't hear about.”
In Colorado, $12 an hour still isn't enough to get by in some areas. The Center for Economic and Policy Research says if minimum wage hikes had kept up with increases in worker productivity since 1968 – when the wage was linked to the Consumer Price Index – minimum hourly pay would have topped $21 by 2012.
This story was produced with original reporting from Michael Booth for The Colorado Trust.