Minimum wage rises in Colorado, 19 other states

Impact on employers debated as some must now pay twice the amount dictated by federal law

Associated Press
Posted 1/2/19

As of Jan. 1, Colorado's minimum wage is $11.10 an hour, a 90-cent hourly increase from 2018. The Centennial State is not alone, as 19 other states also raised the minimum wage with the dawn of 2019. …

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Minimum wage rises in Colorado, 19 other states

Impact on employers debated as some must now pay twice the amount dictated by federal law

Posted

As of Jan. 1, Colorado's minimum wage is $11.10 an hour, a 90-cent hourly increase from 2018. The Centennial State is not alone, as 19 other states also raised the minimum wage with the dawn of 2019.

Across the country, some business owners have found they must pass the additional cost on to the consumer.

At Granny Shaffer's restaurant in Joplin, Missouri, owner Mike Wiggins is reprinting the menus to reflect the 5, 10 or 20 cents added to each item.

A two-egg breakfast will cost an extra dime, at $7.39. The price of a three-piece fried chicken dinner will go up 20 cents, to $8.78.

Wiggins said the price hikes are necessary to help offset an estimated $10,000 to $12,000 in additional annual pay to his staff as a result of a new state minimum wage law that took place Jan. 1.

“For us, it's very simple: There's no big pot of money out there to get the money out of” for the required pay raises, Wiggins said.

The new minimum wage requirements are affecting millions of workers. The state wage hikes range from an extra nickel per hour in Alaska to a $1-an-hour bump in Maine, Massachusetts and for California employers with more than 25 workers.

Seattle's largest employers now have to pay workers at least $16 an hour, and in New York City, many businesses must pay at least $15 an hour. That's more than twice the federal minimum of $7.25 an hour.

The state and local wage laws come amid a multi-year push by unions and liberal advocacy groups to raise the minimum wage to $15 an hour nationwide. Few are there yet, but many states have ratcheted up wages through phased-in laws and adjustments for inflation.

In Arkansas and Missouri, voters in the fall approved ballot initiatives raising the minimum wage after state legislators did not. In Missouri, the minimum wage rises from $7.85 to $8.60 an hour as the first of five annual increases that will take it to $12 an hour by 2023.

At Granny Shafffer's in Joplin, waitress Shawna Green has seen her base pay go up. But she has mixed emotions about it.

“We'll have regulars, and they will notice, and they will bring it to our attention, like it's our fault and our doings” that menu prices are increasing, she said. “They'll back off on something, and it's usually their tips, or they don't come as often.”

Economic studies on minimum wage increases have shown that some workers do benefit, while others might see their work hours reduced. Businesses may place a higher value on experienced workers, making it more challenging for entry-level employees to find jobs.

Seattle, the fastest-growing large city in the U.S., has been at the forefront of the movement for higher minimum wages. A local ordinance raised the minimum wage to as much as $11 an hour in 2015, then as much as $13 in 2016, depending on the size of the employer and whether it provided health insurance.

A series of studies by the University of Washington has produced evolving conclusions.

In May, the researchers determined that Seattle's initial increase to $11 an hour had an insignificant effect on employment but that the hike to $13 an hour resulted in “a large drop in employment.” They said the higher minimum wage led to a 6.9 percent decline in the hours worked for those earning under $19 an hour, resulting in a net reduction in paychecks.

In October, however, those same researchers reached a contrasting conclusion. They said Seattle workers employed at low wages experienced a modest reduction in hours worked after the minimum wage increased, but nonetheless saw a net increase in average pretax earnings of $10 a week. That gain generally went to those who already had been working more hours while those who had been working less saw no significant change in their overall earnings.

Both supporters and opponents of higher minimum wages have pointed to the Seattle studies.

The federal minimum wage was last raised in 2009. Since then, 29 states, the District of Columbia and dozens of other cities and counties have set minimum wages above the federal floor. Some have repeatedly raised their rates.

“The federal minimum wage has really become irrelevant,” said Michael Saltsman, managing director of the Employment Policies Institute, a Washington, D.C.-based group that receives funding from businesses and opposes minimum wage increases.

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