Thursday, January 13, 2011

A Boost for Colorado's Lowest-Paid Workers

A grand total of $15,308 a year: That's the before-tax pay for a full-time worker making Colorado's minimum wage. The good news: that wage, of $7.36 an hour, is 11 cents more than it was last year. The bad news: the cost of everything else is going up.

Recent college graduate Laura Baker, who makes just above minimum wage, says that extra $20 a month will really help.

"For a salaried person, that may sound a little bit trivial, but for people who are just struggling to make sure they can go buy groceries, twenty bucks is a lot. That can help you buy a bus pass. It can help you buy school supplies for your kids."

Baker says she works two lower-paid part-time jobs, and has been unable to find work in her chosen profession.

The National Employment Law Project reports that nearly 60,000 Colorado workers make minimum wage, which still puts them below the federal poverty level. In all, nearly one-fifth of Coloradans make at or below poverty-level wages.

In Colorado, the minimum wage increases when cost of living goes up, and last year it was the only state where the minimum wage decreased because the cost of living had fallen slightly.

Ann Thompson, policy analyst with the National Employment Law Project, says increasing pay for the lowest-paid workers produces a variety of benefits, from lowered absenteeism and improved morale to boosting the economy.

"Putting a little bit more money in the pockets of people who are most likely to spend their income immediately can give a little bit of a bump to the state's economies."

Colorado is one of 17 states with wages higher than the federal minimum, and one of seven where the minimum wage increased this month. Thompson says other states use the federal minimum wage standard, which is $7.25 an hour.

"One of the big problems we've seen over the last 40 years with minimum wage policy is that the federal minimum wage especially has failed to keep up with the rising cost of living. "

Thompson says if the federal minimum wage had been pegged to the cost of living, it would be more than $10 an hour. Opponents of indexing the state or federal minimum wage claim it increases costs to business, with very little benefit to workers.

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