Would a Minimum Wage Hike to $12 by 2020 Help Colorado?
Proponents of the $12 by 2020 proposal rally to turn in nearly 200,000 signatures to secure a spot on November's ballot.
What would happen if, in November, Colorado voters passed Amendment 70, opting to raise the minimum wage from $8.31 to $12 an hour by 2020?
The state's economy would grow.
That's according to "The Impact of a $12.00 Minimum Wage on Women in Colorado," from the a new study by the Colorado Women’s College at the University of Denver. The study says that most low-wage workers would see an increase in the bank, even taking into account cuts to any government benefits they already receive — and that's not all. Women would benefit more than men. Consumer spending would shoot up. An additional $400 million would be added to the state’s GDP.
But a higher minimum wage would not help all low-income workers, the study found. Some who depend on public assistance might no longer qualify for benefits.
Households with two people working full-time and one toddler and one infant would risk losing benefits known by the acronyms WIC (The Women Infants and Children Nutrition Program), CCCAP (Colorado Child Care Assistance Program) and LEAP (Low Income Energy Assistance Program). Single parents with one preschool-aged child could lose SNAP (Supplemental Nutrition Assistance Program) benefits and lose coverage of their monthly health-care premiums. They could wind up paying more for food and catastrophic health emergencies.
Indeed, the proposed minimum-wage hike of $12 by 2020 would be a far cry from the livable wage of $29.80 an hour that a single adult with two children needs to live without public assistance.
The DU authors reviewed fifteen years of studies and statistical evidence from cities and states that have raised the minimum wage, including Seattle, Missouri and Oakland, California.
The study's findings rely on some guesswork: Inflation would occur at a 2 percent rate, and workers would be employed 52 weeks a year at forty hours a week — numbers that are hypothetical.
“It is very difficult to predict actual effects on household budgets for minimum wage employees, in part because minimum wage work tends to be unpredictable: over 40 percent of minimum wage jobs are subject to on-demand scheduling practices that give hourly workers little notice about when they will work and cause fluctuations of eight hours per week or more in the number of hours worked,” the report states.
Women have the most to gain from a minimum-wage increase; 290,000 will see a rise in income, according to the report.
“For a family with two children, a minimum wage boost to $12 per hour could cover the cost of six-to-eight months of transportation expenses; four-to-seven months of rent; or a semester to a full year at a community college,” the report states.
There is little evidence over the past fifteen years that the minimum wage has a direct impact on job loss when comparing cities or counties that raised the wage with those that did not, according to the study.
Tyler Sandberg, the campaign manager of Keep Colorado Working, the group opposing Amendment 70, refutes that claim. He points to an August report from the conservative think tank the American Enterprise Institute. That report states that Washington, D.C., has lost 1,400 restaurant jobs in the first six months of 2016 after the city's minimum wage rose to $10.50, despite Virginia and Maryland suburbs adding 2,900 restaurant jobs in the same time period.
Amendment 70 opponent Tyler Sandberg speaks against the $12 by 2020 proposal voters will decide on in November.
The DU study’s author, the Daniels College of Business's Jack Strauss, says raising the minimum wage will likely drive job growth, not job loss.
“Tell that to Alfonso Nunez, whose family has owned La Cueva Mexican restaurant on East Colfax for over 40 years, who says it will cost his family $72,000,” wrote Sandberg in an e-mail to Westword. “With a 3-4 percent profit margin, Alfonso doesn't know where that money will come from.
"Or tell it to Janelle Sullivan, a Democrat who owns a pottery studio in Littleton and supports raising wages for workers but says the 44 percent increase will be 'devastating' to her small business, forcing her to lay off the very low-wage worker this is supposed to help," his e-mail continued.
Sandberg is a Republican strategist who works for EIS Solutions, an advocacy group that builds grassroots support for CEOs. Keep Colorado Working has the backing of the Colorado Restaurant Association, the trade group led by representatives of international corporations including McDonald's, Sysco and Outback Steakhouse, as well as local restaurateurs.
Proponents of Amendment 70 touted the DU study's findings as more proof that their campaign is grounded in facts.
Felicia Griffin, a spokeswoman for Colorado Families for a Fair Wage, the group fighting for the measure, said of the report, "Independent University of Denver researchers have validated our position that raising the wage to $12 by 2020 is smart because it will boost the economy and be fair for working families struggling to pay for rent and food.”
How independent is the research?
The organization that provided the research questions and collaborated on releasing the report, The Women’s Foundation of Colorado, has funded the University of Denver; ProgressNow, a liberal advocacy group which supports Amendment 70; the Colorado Democracy Alliance, wealthy donors who have worked effectively to win seats for Democrats; and 9to5 National Association of Working Women, an activist organization that has contributed at least $10,000 to Colorado Families for a Fair Wage, the group championing Amendment 70.
You can read the full report here.
Correction: The original story stated the Women's Foundation of Colorado funded the study. The Colorado Women's College Collaboratory funded the study alongside DU. The Women's Foundation of Colorado, which has funded the University of Denver and a scholarship at the Colorado Women's College, participated in the collaboration, devoted staff time to the project, released the project under its name, and provided the research questions to the University of Denver. Spokeswoman Chelsey Baker-Hauck clarified that it did not provide direct financial support.