Colorado's minimum-wage workers to get boost in pay for 2012
On January 1, 74,000 low-wage workers in Colorado will get a 3.8 percent raise when the state's minimum wage goes up by 28¢ to $7.64 per hour. For employees who work full-time all year, this amounts to $582 more per year.
Voters approved Amendment 42 to Colorado's constitution in 2006, raising the minimum wage and requiring that the wage to be adjusted each year by the rate of inflation in Colorado. Inflation increased by 3.8 percent between July 2010 and June 2011, according to the Boulder-Denver-Greeley Consumer Price Index.
Raising the minimum wage and adjusting it for inflation was good for Colorado families in 2006, and the policy remains good today. This is especially true as we work our way through the worst recession since the Great Depression.
Adjusting the minimum wage for inflation ensures that its value keeps pace with the cost of consumer goods over time. As a result, minimum-wage workers will be able to buy the same value of goods and services in 2012 as they did in 2007, when Amendment 42 took effect and the minimum wage was raised to $6.85 per hour.
This is the largest increase in the minimum wage since 2006 because inflation has increased more than in past years. Because inflation declined in 2009, the 2010 Colorado minimum wage dropped by 4¢ to $7.24 per hour. This is how the process was intended to work – the minimum wage is adjusted annually to keep pace with the cost of living.
In addition to those currently working for minimum wage, economists estimate that another 17,000 workers who make slightly more will also get a raise as employers adjust pay scales to maintain current differences in pay levels.
Eight out of ten minimum-wage workers in Colorado are age 20 or older, according to an Economic Policy Institute analysis of census data. Eight out of ten work 20 hours a week or more. Almost six out of ten are women. Whites make up two-thirds of minimum-wage workers, and slightly more than one-quarter are Hispanic. Minimum-wage workers make up 3.4 percent of Colorado's workforce.
Colorado is one of eight states that adjust their minimum wage each year by the rate of inflation. The others are Arizona, Florida, Montana, Ohio, Oregon, Vermont and Washington.
Human resources directors estimate that salary increases among all employers will average about 3 percent in 2012.