The Colorado Constitution, by a 2006 voter amendment, has a mechanism for adjusting the state’s minimum wage annually to reflect cost of living. Accordingly, the state’s bottom pay level increased from $8 an hour to $8.23 beginning Jan. 1. That is a nice boost, but it does little to elevate Colorado’s lowest wage-earners into the realm of a livable salary. Colorado is far from alone.
Minimum wage, for all its noble intent in ensuring that workers are not unduly taken advantage of by miserly employers, is not a particularly effective means of guaranteeing that all workers are earning enough to meet their basic needs. In that disconnect lies the fundamental issue that commands discussion at the local, state and federal levels: how to ensure that American workers are paid adequately.
Colorado is one of nine states that saw an increase in its minimum wage Jan. 1, and 29 states as well as Washington, D.C., have minimum wages higher than the federal floor of $7.25 an hour – a wage that translates into $15,080 annually for a full-time worker. That amount, or the $17,118 Colorado’s new minimum wage would yield annually, keeps workers above the unrealistically low federal poverty level of $11,670 in annual earnings, but that classification is relatively meaningless when it comes to purchasing power. The average monthly rent in the United States for 2013 was $962 – a sum that would leave $3,536 for an individual to cover the year’s food, utilities, transportation and clothing costs nationwide. In Colorado, average rents are $1,026 a month. At $8.23 an hour, the state’s lowest earners would have just over $4,800 remaining – or $400 a month – to cover their non-rent-related expenses. That does not provide much cushion, or much purchasing power. The personal and economic implications of such tight margins are far-reaching, and they tighten when children factor into the equation.
Even at President Barack Obama’s proposed federal minimum wage of $10.10, the country’s lowest earners are relegated to a deeply disadvantaged position. The state minimums that aim to more fully protect these workers do little to remedy the situation. The highest minimum wage, in effect, is $9.50 an hour in Washington, D.C., does not close the glaring wage gap there or in the national context. It helps, but not enough.
Living-wage movements consider a more local, holistic and realistic angle to this enduring problem. Examining wages in the context of local cost-of-living as well as employment needs and opportunities is perhaps a more appropriate means of addressing the income disparity that plagues the United States broadly, and individual communities in varying degrees. La Plata County Thrive! Living Wage Coalition is pushing for such a conversation locally, and calculates that $12.40 an hour is the baseline living wage for a single person in La Plata County – a figure that 27 percent of local residents do not attain. Those numbers make the state and federal minimum wages irrelevant to local low-wage earners.
The solution, though, is far from simple. Mandating that employers pay higher wages has implications of its own. It could translate into fewer jobs, reduced profits and further-reaching ramifications for the local economy. Cost of food, housing, and transportation are factors, as are the local employment base and worker skills. The conversation is sure to be a long one and not solved by incremental increases in wages that are too low to be meaningful.