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New Minimum-Wage Law Could Bring Relief to High-Cost CO Counties

Colorado ranks in the top five "cost burdened" states, where workers are forced to spend more than 50 percent of their income on rent. (Galatas)
Colorado ranks in the top five "cost burdened" states, where workers are forced to spend more than 50 percent of their income on rent. (Galatas)
May 31, 2019

DENVER – Gov. Jared Polis signed House Bill 1210 into law this week, repealing a 1999 prohibition against local governments creating their own minimum wages.

Chris Stiffler, an economist with the Colorado Fiscal Institute, says the measure opens the door for counties and cities to address significant cost-of-living disparities across the state. He adds Colorado has seen tremendous growth in low-pay service jobs in the past several decades, all while housing and other costs continue to rise.

"The cost of college education, cost of groceries, all going up faster than wages are growing,” says Stiffler. “And so, acknowledging that a quarter to 20 percent of our workforce are low-wage workers that also need to make a living and thrive in Colorado, addressing the minimum wage is one way to get there."

Stiffler notes workers earning the state minimum, $11.10 an hour, have to put in over three weeks a month full time to cover rent on an average two-bedroom apartment in places like Boulder or Denver. He says that same $1,500 apartment costs just $500 in places like Yuma.

Opponents of raising the minimum wage have warned that businesses would likely relocate, eliminate jobs, or reduce worker hours in order to maintain profitability.

Researchers at the University of California at Berkeley found that wage increases in bordering states did not lead to job loss, but increased worker spending power and boosted local economies. Stiffler admits that some workers could lose hours in businesses operating on slim margins, but he doesn't believe that owners will lay off large swaths of people or move their operations.

"You can't export your restaurant to Kansas, if your restaurant has to be in Vail serving skiers,” says Stiffler. “The demand for labor is a lot more inelastic. They need workers; they're not going to can as many workers as they are leading on."

He notes Colorado has become a much more expensive state in recent years, and ranks in the top five for states where workers are forced to spend over half their income on rent.

Under the new law, municipalities can change local minimum wages starting in 2020. Increases will be capped at 15% annually, and new wage levels wouldn't go into effect until January of 2021.

Disclosure: Colorado Fiscal Institute contributes to our fund for reporting on Budget Policy & Priorities, Census, Education, Livable Wages/Working Families. If you would like to help support news in the public interest, click here.
Eric Galatas, Public News Service - CO