Testimony: Support Local Control of Minimum Wage in Colorado

Rich Jones, director of policy and research, testified to the House Local Government Committee in support of local control of minimum wage in Colorado.  

The Bell Policy Center supports HB18-1368 to repeal the state law that prohibits local units of government from setting a minimum wage for their communities. Allowing local governments, either through an act of their governing body or through initiative or referendum, to set a higher minimum wage will give them the power to respond to the varied and unique needs of their communities. They will be better able to respond to the challenges faced by those who work in low-wage jobs who are trying to keep pace with the increasing cost of living in many communities. Economic analyses indicate local control of minimum wage hikes enacted by over 40 U.S. cities and counties have boosted earnings and improved job quality without reducing employment or encouraging businesses to leave cities. 

Thirty-four U.S. cities, including Albuquerque, NM, Flagstaff, AZ, Minneapolis, MN, Portland, ME, and Tacoma, WA, and several counties including Bernalillo and Santa Fe in New Mexico have adopted minimum wages that are higher than the federal or their state’s minimum wage. These local wages better reflect higher local living costs than do the federal or state minimum wages.  

Colorado is a varied state with significant differences in the cost of living among its many communities. For example, according to the 2015 Self-Sufficiency Standard for Colorado published by the Colorado Center on Law and Policy, the hourly wage needed to be self-sufficient for an adult and a preschooler is $26.86 in Boulder County, $17.41 in Mesa County, $20.18 in El Paso County, and $14.80 in Yuma County. The amount needed to be self-sufficient varies by family size, composition, and location. Yet the state minimum wage is the same for all. 

The same variation also shows up when you compare the state minimum wage to median wages in different parts of the state. In 2017, the $9.30 per hour minimum wage represented 50 percent of the 2016  statewide median hourly wage of $18.76. However, it represented only 42 percent of the Boulder-Longmont metro area $22.21 median hourly wage and 46 percent of the Denver-Aurora metro area $20.26 median hourly wage.  

Economic evidence indicates higher minimum wages enacted in U.S. cities have boosted earnings without slowing job growth or causing businesses to leave. A detailed analysis of San Francisco’s minimum wage shows from 2004 to 2011, private sector employment grew by 5.6 percent in San Francisco, but fell by 4.4 percent in other Bay Area counties that did not have a higher local wage. Among food service workers, employment grew by 17.7 percent in San Francisco, faster than in the other Bay Area counties.

An analysis of 288 pairs of contiguous U.S. counties with different minimum wages between 1990 and 2006 finds higher minimum wages did not reduce employment. In addition, it finds no evidence of businesses crossing borders or reducing employment in response to higher minimum wages.  

Other rigorous analyses of local control of minimum wage laws find they raise the incomes of workers in low-wage jobs without affecting employment. For example, Santa Fe’s higher local minimum wage increased workers’ income with no negative effect on employment, including in the accommodation and food services industries that have a high proportion of workers earning the minimum wage.  

We urge you to support HB18-1368 to allow local control of minimum wage in Colorado, so local governments can better meet the unique needs of their communities. 

We thank the sponsors for bringing this bill to you today. We also thank the committee for the opportunity to share our thoughts with you. I am happy to answer any questions.  

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