At least five cities and one more Colorado county are considering raising their local minimum wage, which if approved, could go into effect as soon as Jan. 1.
The city councils of Boulder and Longmont heard presentations in August, while Lafayette, Erie and Louisville are scheduled to hear consultant reports this month. Adams County spent August collecting feedback from citizens and plans to have an update Tuesday at its next study session for the board, according to county officials.
The push for higher minimum wages appears to have a lot of public support even from small businesses, though there’s much less agreement on how much to raise wages and how fast. The high costs of housing, medical services and living in Colorado are reasons for the support, but the impact on small businesses that could see large wage hikes starting in January are also a concern being debated in the communities surrounding Denver, which adopted its local wage five years ago.
For the five cities, which together hired consulting firm ECONorthwest to do an economic analysis, the interest was to get minimum wage in line with the higher rates in Denver, currently at $18.29, and unincorporated Boulder County, where hourly wages shot up to $15.69 this year.
“The recommendation was not that you have to do this but for every municipality to look at all the data and decide whether you think it’s appropriate to raise the minimum wage,” said Andrew Dyke, a senior economist and partner at ECONorthwest. “And if you do this, our recommendation would be to attempt consistency across the region because that provides certainty and, you know, one of the things that business owners don’t like is uncertainty.”
Getting to one regional wage, however, seems unlikely.
At the end of the Boulder City Council work session Aug. 22, two possible proposals emerged for draft ordinances. Neither lined up exactly with Denver’s or Boulder County’s.
The path forward also seemed unclear at the end of the Longmont meeting on Aug. 27, where discussion ended after the last person from the audience spoke.
“We want it done for Longmont. We don’t want to copy and paste Denver, we don’t want to copy and paste Boulder. We want what’s right for our economy,” said Mike Root, founder of Copper Sky Distillery in town, who was nearly the last person to speak during the public comment period. “We have a unique position to be able to stand up for what Longmont wants (and) don’t have to just do what the county tells us to do.”
Sandi Seader, Longmont’s assistant city manager, said that, indeed, the council didn’t give any direction on next steps that evening. However, she added, the council could make a motion at any meeting.
While there’s no deadline to adopt its own minimum wage, state law requires the local government “engage stakeholders in public consultation,” according to the rules. But a new wage can only start when the state’s new rate starts, or on Jan. 1 of any given year, so if not 2025, then a new wage would start in January 2026.
Overall though, there seemed to be agreement among local residents, council members and the communities that the local minimum wage needs to rise.
“What I hear from so many in our community, including a lot of business owners, too, is that we all pay when workers aren’t paid enough. Workers are harmed and so are we. We pay in rising numbers of evictions and homelessness (and) people needing financial assistance. More pollution and traffic from people driving longer distances to get to work,” Nicole Speer, Boulder’s Mayor Pro Tem, said during the worksession. “A couple of years ago, it took two full-time jobs to make ends meet here. Now it takes four. … Denver’s cost of living is 20% lower than ours (but) their wage is already almost 30% higher than ours.”
Local minimum wage history
Local governments in Colorado were allowed to enact their own minimum wage after House Bill 1210 passed in 2019. Some restrictions were added, such as up to 33 cities or counties, or 10% of the state’s 332 local governments, could adopt a local minimum wage. Annual increases could be no greater than 15% or $1.75 a year.
The Colorado Municipal League, which advocates for local governments, supported the 2019 change. But Kevin Bommer, CML’s executive director, said their support behind the bill was to “get in the room to help negotiate some guardrails,” he said. One thing CML got into the bill was to allow regional agreements, which is what the Boulder-area cities started out with last year.
“We agreed with the business community that, as much as I hate it when people use it, you could have a patchwork of different minimum wages with employees working for employers in multiple (cities),” he said. The idea, he added, was for “intergovernmental agreements to harmonize local minimum wages across the region and go beyond county lines.”
Denver was the first city to adopt its own, sending its hourly minimum to $12.85 in 2020, while the state went to $12. Today, Denver’s minimum is $18.29, compared with the state’s $14.42. Both are pegged to changes in annual inflation, or the Consumer Price Index, so Denver’s rate will increase to $18.81 while Colorado’s grows to $14.81 on Jan. 1.
This year, two more local governments added their own minimum after opting in last year. Unincorporated Boulder County, which had joined the regional effort but then passed its own increase ahead of everybody else, will see its wage move to $16.57 in January.
Edgewater jumped to $15.02 this year and will increase to $16.52 next year.
The impact of higher wages
Four years after Denver adopted a higher minimum, it’s challenging to find good data on the impact.
A state labor department report in 2023 found that as Denver’s minimum wage rose faster than the state’s, some jobs were lost. But overall wages — not just for minimum wage earners — increased faster than in other cities. The report tried to isolate the negative economic effects of COVID, but data also lagged so the report seems incomplete, capturing stats just through mid-2021.
ECONorthwest’s report relied on some of the state’s report but also used a variety of data sources, such as the U.S. Census’ American Community Survey and wage and job data from the Bureau of Labor Statistics. It also looked at nearly 1,000 responses to the regional poll about minimum wage.
Minimum wage earners also tend to be a small part of the overall labor force. Dyke estimated that 8% to 10% of workers in the Boulder region earn a minimum wage, which includes tipped workers who are paid $3.02 less per hour but can accept tips. Because they’re the lowest earners, their impact on state sales tax revenues or gross domestic product may always be negligible. So, it’s more than just looking at pure data, he said.
“We don’t see big effects,” Dyke said. “And that’s where I think it’s important to look at both the cost and the benefits and take into account what stakeholders say.”
Jeffrey Zax, a professor who tracks labor laws at the University of Colorado, believes that most workers, especially in Boulder, earn more than minimum wage. Due to the labor shortages a year after the pandemic struck and employers were desperate to find help, wages soared in Colorado and elsewhere.
“As an economist, I am generally very negatively disposed toward these kinds of policies. You’re interfering with the market,” Zax said. “You have to have a good reason if you’re interfering and a reason is not that people can’t afford to live here. That’s not an employer’s responsibility. It’s like asking an employer, ‘Look, you’ve got a worker who’s worth $15 an hour but he can’t afford rent so we want you to pay him $20.’ … If those regulations become binding, the employer is going to say, ‘Look, I’m going to step 2 feet outside of Boulder city limits. I’ll move my business there.’”
Meanwhile, in Denver, some of the city’s top chefs are closing restaurants, several South Broadway retailers are heading south for Englewood and office buildings are now 34% vacant. On the other hand, companies and restaurants are still opening in the city. And Denver’s unemployment rate in July was 4.3%, lower than Colorado Springs, Grand Junction and Pueblo. A year ago, Denver’s rate was even lower and only higher than Boulder and Fort Collins.
Raising the lowest wage does give a group of earners a little more money, where higher earners likely see little to no impact, said Ben Zipperer, a senior economist at the left-leaning Economic Policy Institute. The lowest earners include a disproportionate number of women and people of color.
“If we do not raise the minimum wage, those are the people that continue to face the consequences of wage inequality,” Zipperer said. “When you raise the minimum wage, economic research does show that it reduces the number of people in poverty. That is both an important motivation and also an important consequence of a higher minimum wage.”
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