Colorado's minimum wage to rise to $7.36 in 2011

Colorado's minimum wage will increase by 12¢ next year, rising to $7.36, and that's good news not just for hard-working Coloradans but the rest of the state as well.

A calculation based on this year's inflation rate, an update of a formula approved by voters in 2006, is the reason for the wage increase, but the impact goes far beyond number-crunching. Workers and families in every community of the state will feel the benefits of this small but important change.

We start with the notion that hard work deserves fair pay, but in concrete terms, raising the minimum wage puts more money into Colorado's economy. Families will have more to spend on rent, groceries, restaurants, school supplies and other necessities.

Before voters approved an increase in 2006, the minimum wage hadn't gone up for almost a decade, and workers couldn't keep up with the cost of living. When the rate increased, an estimated 138,000 workers got a pay increase. Here are some facts about that 2006 workforce.

• Those 138,000 workers accounted for about 7 percent of the state's workforce.

• The vast majority of those workers were adults, with 70 percent of them over age 20.

• Almost half (47 percent) of affected families relied on a minimum-wage worker for all of the family's weekly earnings.

• Raising the minimum wage helped Colorado's kids: 57,000 children had parents affected by the minimum-wage hike.

Helping families keep up with the cost of living is just as important now as it was in 2006, especially as we work our way through the worst recession since the Great Depression.

Last year, the minimum wage declined by 4 cents because there was negative inflation in the Denver-Boulder-Greeley consumer price index, the index used for calculating Colorado's statewide inflation rate. (The survey that produces that index is the only one that is conducted exclusively within Colorado's borders.) This year, the inflation rate rose by 1.7 percent.

The minimum wage also will go up for tipped employees, increasing 12¢ to $4.34. Colorado's Minimum Wage Amendment allows employers to pay tipped workers $3.02 less than regular workers. The increase is important for workers like waiters and waitresses because they, too, are often struggling to raise a family and make ends meet.

Colorado's approach to tipped workers, offsetting part of the minimum wage with tips, is similar to that used by many other states. For example, tipped workers in Arizona get $3 less than the full minimum wage, in Florida they get $3.02 less and in Hawaii they get 25¢ less. Seven states don't allow for a reduction for tips and instead simply require that tipped workers receive the same wage as other minimum-wage workers.

The Bell Policy Center supported Amendment 42, which allows Colorado's minimum wage to be increased or decreased each year based on inflation, and we participated in public hearings that are part of the Colorado Department of Labor and Employment's process for adopting the minimum wage order. The Bell was one of five organizations that urged adoption of the increased minimum wage.

The department still must formally approve the increase, but the new wage would take effect Jan. 1, 2011.