Report: Minimum wage hike would add 1,700 Colo. jobs
Increasing the federal minimum wage from $7.25 to $9.80 per hour would give 420,000 Colorado workers a raise and generate approximately 1,700 new jobs over three years, according to How raising the federal minimum wage would help working families and give the economy a boost, a report released today by the Economic Policy Institute (EPI). Nationally, it would increase wages for 28 million workers and generate approximately 100,000 jobs over three years.
Affected workers in Colorado would see their annual wages go up by $721 on average. As these workers spent their increased earnings, it would result in an estimated $388 million being added to Colorado's economy over the three-year phase-in of the increase.
"The projected increase in consumer spending is critical to any recovery, especially when weak consumer demand is one of the most significant factors holding back new hiring," according to EPI.
EPI's estimates accounted for the decrease in corporate profits resulting from the wage increase. It also points out that recent research shows that, despite skeptics' claims, raising the minimum wage does not cause job loss.
According to EPI's analysis, more than 80 percent of the Colorado workers affected would be 20 years old and older, with almost half (49%) working full-time. Slightly less than half (46%) of those affected would have some college, an associate's or bachelor's degree, and about one-quarter (24%) would have children. More than 320,000 Colorado children would have at least one parent affected by the increase.
Two proposals pending before the U.S. Congress would increase the minimum wage from $7.25 to $9.80 through three incremental increases of 85¢, after which it would be indexed to inflation – S. 3452, sponsored by Sen. Tom Harkin, D-Iowa, and H.R. 6211, sponsored by Rep. George Miller, D-California.
Colorado's minimum wage is $7.64 per hour and is indexed for inflation. Voters approved a proposal in 2006 to increase it from the then-federal rate of $5.15 to $6.85 and adjust it for inflation.
The Economic Policy Institute is a non-profit, non-partisan think tank, created in 1986 to broaden discussions about economic policy to include the needs of low- and middle-income workers.
Article posted on August 14, 2012