Democratic candidates are coalescing behind raising the federal minimum wage to $15 per hour, up from its current $7.25 per hour. It has not been raised since 2009, and its value has significantly decreased since its peak in 1968. In 2018 dollars (adjusted for inflation), the 1968 minimum wage would equal $10.15. As the Economic Policy Institute (EPI) has shown, the earning power of the 1968 minimum wage is not nearly as high as it once was.

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“The economy has grown dramatically over the past 50 years, and workers are producing more from each hour of work, with productivity nearly doubling since the late 1960s. If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be over $20 an hour today,” according to EPI.

This is why substantially raising the minimum wage is so important — we need wages to match the growth of costs and productivity in a way that it hasn’t in over 50 years.

Studies consistently show raising the minimum wage will help workers in low-wage jobs, with no or minor effects on employment numbers. Many Democratic presidential candidates see raising the minimum wage as an important step toward helping alleviate working poverty. The proposals closely mirror the Raise the Wage Act, a bill that recently passed the House of Representatives. The bill would:

• Gradually raise the minimum wage to $15 per hour in 2024
• Tie future minimum wage changes to the median worker salary, nationwide, so if middle class wages go up, so would the minimum wage
• Phase out the current $2.13 per hour minimum wage for tipped workers, a wage that hasn’t been increased since 1996

Minimum Wage in Colorado

Colorado voters approved a gradual minimum wage increase at the ballot box in 2016. The amendment, which incrementally raises the state’s minimum wage up to $12 per hour in 2020, received more than 55 percent of the vote.

Just this past legislative session, a bill to allow cities to raise their own minimum wage above the state’s passed through both chambers and was signed by Governor Polis. This will allow cities with higher costs of living to cater to the needs of their residents. Many cities on the Front Range are struggling with how to ensure workers can afford to live in the cities they work. Allowing cities to raise their wages will help to ensure wages in high cost regions of the state are able to match cost of living increases and differences.

The Bell’s Work on Minimum Wage

The Bell Policy Center has looked at the question of who benefits from the minimum wage in a multitude of ways. Earlier this year, we looked at Colorado workers, writ large, and found over 524,000 workers in the state would benefit from a higher minimum wage. Also, many of those workers — more than 116,000 — are centered in the Denver metro area, as costs are higher in the state capitol than in many other parts of the state.

The benefits of raising the minimum wage is borne out in the large-scale wage data released by the federal government. Looking closely, while wages have not grown much more than inflation recently, low-wage workers have seen a noticeable wage bump that can largely be attributed to raising the wage floor in Colorado.

The Bell has concluded, when done right, raising the minimum wage is a powerful and successful tool for helping workers in low-wage jobs and alleviate some of the poverty plaguing sectors of our state.