House Bill 1210: Minimum-wage chaos across Colorado
The bill would potentially turn every Colorado city into a laboratory for even the most outlandish hikes in the minimum wage — without regard to the impact on the broader state economy or on neighboring communities.
The change would let local governments disregard the will of Colorado voters, who set the statewide minimum wage through the ballot box and amended it into the state constitution.
Local governments—and more concerning, labor groups and special interests—can force different minimum wages for different types of jobs and industries—throwing small businesses and job providers into disarray.
The crippling effects of substantial, mandated minimum-wage hikes are well documented. Years of research into significant minimum-wage increases mandated by local and state governments around the country have made clear they smother growth, close businesses and kill jobs.
In New York state — where a dizzying and convoluted array of minimum-wage hikes for different regions and industries began phasing in a few years ago, and New York City’s minimum wage rose to $15 an hour Dec. 31 — dozens of businesses have scaled back or shut down.
In the San Francisco Bay area, a Harvard Business School study found that each dollar increase in locally imposed minimum wages had accelerated the restaurant-closure rate by 14 percent.
What’s more, the hikes backfire on the very people they are intended to help — low-to-moderate wage earners. University of Washington researchers concluded a minimum-wage hike by the City of Seattle made it harder for the unemployed to find jobs — and suppressed overall monthly earnings for workers because their employers had cut back hours to pay for the wage hike.
Colorado voters already have approved statewide increases in the minimum wage, most recently in 2016. It is being phased in and will increase annually with inflation after 2020.
Yet, HB1210 seeks to let each Colorado municipality arbitrarily set its own rate —doubling down on all the problems posed by minimum-wage hikes in general.
The result could lead to a crazy quilt of different minimum wages and the assorted regulations that go with them — from one Colorado city to the next and even among suburbs in the same metro area.
Colorado could be in for a bureaucratic nightmare. California now has more than 20 local governments that set their own wage and labor standards, creating what has been called a bewildering patchwork not only of different minimum wages but also phase-in schedules and compliance details.
Communities and their interests would be pitted against one another. Employers in cities that have higher minimum wages having to cut back positions and hours to afford the wage hikes while employers in neighboring cities that don’t raise their minimum wage would lose workers to the higher-paying communities.
It would be a throbbing headache for larger employers that span multiple cities — and would have to juggle different wage mandates and regulations just to make payroll.
Don’t forget that the cities themselves would have to pay more — even a lot more — to their own municipal employees if they raise the local minimum wage, as the bill’s own fiscal note prepared by legislative staff acknowledges. And taxpayers would get stuck with the tab.
Connecticut cities and towns could face as much as $24 million in increased labor costs by 2022 under a proposed statewide wage hike in that state.