DENVER (CBS) – The U.S. labor secretary was in Colorado Wednesday to support raising the state’s minimum wage.
Ballot measure Amendment 70 would raise Colorado’s minimum wage to $12 an hour by 2020, and U.S. Labor Secretary Tom Perez says it would be good for Colorado’s economy. But studies — even data from his own department — vary widely on whether minimum wage hikes hurt more than help, especially in the restaurant industry.
Colorado’s minimum wage is automatically increased every year for inflation. If the ballot measure fails the wage will still increase to about $9 an hour by 2020.
“I come here on behalf of the president to say, ‘Let’s vote yes on this critical initiative,'” Perez said.
Perez told business owners in Denver that raising the minimum wage is a matter of fairness.
“There have been study after study done around the country showing that when you have reasonable increases like we have here in Colorado, people can adjust,” Perez said.
But what’s reasonable? The District of Columbia raised its minimum wage from $9.50 to $11.50 over the last two years.
“As someone who lives in D.C., I look at the restaurant growth in our area, and it’s going gangbusters,” Perez said.
Not exactly. Washington restaurants cut more jobs over the last six months of this year than they have in 15 years. Overall the industry grew 1 percent over last year while in surrounding suburbs it grew 4 percent.
It’s unclear if the wage increase is the cause, but Tyler Sandberg with the group opposing the ballot measure says it’s a red flag for Colorado.
“So you’ve got a city that’s pumped full of lobbyist money buying steak dinners, and even that couldn’t survive a 10-15 (percent) minimum wage increase,” Sandberg said.
Supporters counter that Colorado had not only survived, but thrived under the last major increase in 2006. Restaurants added nearly 5,000 jobs in two years. Sandberg argues wages had been stagnant so the market could handle it. Wages have increased every year since then.
“We support raising the wage. The way they’re doing it is going to have unintended consequences, and it’s going to harm Colorado.
“What is very important about this initiative is that its phased in. It’s not $12 Jan. 1, 2017, it’s gradual step up over the coarse next three years,” Perez said.
Critics say the increase would particularly hurt small business in rural Colorado. Supporters say no matter where you live in Colorado, you can’t get by on the current minimum wage — about $300 a week for a full-time worker.