Colorado Legislation Would Restore Local Power to Raise Minimum Wage

In response to the Colorado legislature’s introduction of a bill that would repeal a 1999 state law that blocks cities and counties from adopting a local minimum wage higher than the state minimum wage, Christine Owens, executive director with the National Employment Law Project, issued the following statement:

“Colorado voters approved a state minimum wage increase in 2016 through a voter initiative, but thousands of workers in Colorado continue to struggle to make ends meet.

“Wages in Colorado remain too low for countless workers, and state law prohibits Colorado cities and counties from raising the minimum wage at the local level to lift up their communities. The bill introduced today to give local governments the right once again to raise the minimum wage above the state’s recognizes that the cost of living can vary significantly from one community to another. More than forty cities and counties around the country have adopted local minimum wages higher than the statewide minimum wage, and this bill, if successful, will allow Colorado cities and counties to join them so that workers in their communities can thrive.

“This new legislation pushes back against corporate efforts to block local governments from raising wages for their constituents and enacting other pro-worker policies. Other states that have given in to corporate interests and opponents of wage increases by passing laws that prohibit local minimum wages should look to this bill as a model for once again advancing the interests of workers as well as local democracy.”

Background

Since 1999, Colorado law has prohibited cities and counties in the state from adopting local minimum wage laws. Subsequently, the state legislature kept the state’s minimum wage frozen at the federal minimum wage rate until voters approved Initiative 42 in 2006, which increased the state’s minimum wage to $6.85 per hour and required the state’s minimum wage to be adjusted annually for inflation. As of 2016, Colorado’s minimum wage had reached only $8.31 per hour, however, a level that failed to reflect the cost of living in the state, making it difficult, if not entirely impossible, for workers and families to afford the basics despite working long hours. Because the state legislature, again, did not raise the state’s minimum wage, voters proposed and approved Amendment 70 in 2016, which will gradually raise the state’s minimum wage to $12 per hour.

Despite the progress that Colorado workers and their families achieved through Amendment 70, workers in a number of areas across the state continue to face high costs of living and a minimum wage that does not allow them to meet their basic needs through work. For example, single workers with no children working full time in the Boulder Metro Area already needed $21.88 per hour just to make ends meet in 2017. A single worker with one child working full time in the Boulder Metro Area needed more than $35 per hour to make ends meet as of 2017. In the Denver/Aurora/Lakewood Metro Area, a single worker with no children working full time needed $19.81 in 2017 to afford the basics. A single worker with one child working full time in that same area in 2017 needed more than $34 per hour to make ends meet. Local minimum wages provide a safety valve allowing localities to raise the minimum wage to more adequate levels when gridlock prevents the state legislature or Congress from raising it.

Across the country, more than 40 cities or counties in states such as California, New Mexico, and Arizona have adopted local minimum wage laws that have successfully helped workers better afford the basics.

Local minimum wage laws—which generally impact just a few high-cost communities in a particular state—have proven effective and manageable for businesses. The most recent study of city-level minimum wage increases released in 2018 documents the positive impact of raising the minimum wage in six cities: Chicago, the District of Columbia, Oakland, San Francisco, San Jose, and Seattle. It is also the first study to examine the effects of increasing the minimum wage above $10. The study concluded that “a 10 percent increase in the minimum wage increases earnings in the food services industry between 1.3 and 2.5 percent” without a discernible negative impact on employment.

While opponents of local minimum wages often cite the potential dangers of a “patchwork” of regulations, cities and counties have historically adopted a wide range of differing local laws tailored to specific local problems and needs. Such laws have addressed issues such as zoning, traffic, construction, licensing, environmental protections, and much more—and businesses have adapted. The economic evidence also shows that a city or county that adopts a higher local minimum wage does not become “less competitive” with surrounding areas, another frequent claim by proponents of state level preemption of local raises to the minimum wage. One of the most sophisticated studies of minimum wages was published by economists at the Universities of California, Massachusetts, and North Carolina.[i] The study looked at the impact of minimum wage rates in more than 250 pairs of neighboring counties in the United States that had different minimum wage rates.[ii] Comparing neighboring counties on either side of a state line is an especially effective way of isolating the true impact of minimum wage differences, because neighboring counties tend to have similar economic conditions. The study found no difference in job growth rates.[iii]

Legislators who support an economy that works for all should oppose preemption of local minimum wage laws and support giving local governments the right to adopt higher minimum wage laws. Moreover, a recent national survey shows that most voters believe their local government should be able to adopt policies that reflect local values and view preemption as a threat to local democracy.

The bill introduced today would expressly grant cities and counties in Colorado the authority to adopt and enforce local minimum wage laws that could help them address the high cost of living in their communities and workers’ pressing need for a higher minimum wage. If the Colorado legislature enacts the proposal, Colorado would become just the second state, after Arizona, to win back this basic right. 

[i].        Arindrajit Dube et al., The Review of Economics and Statistics, Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties (Nov. 2010) at 92(4): 945–964.

[ii].        Id.

[iii].       Id.