A recent study released by the University of Denver examines how a $12 minimum wage increase would impact Colorado’s economy.
Coloradans will have the chance to vote for Amendment 70 in November, which would gradually lift the minimum wage from $8.31 an hour to $12 an hour by 2020.
The study, which comes from a partnership between the Colorado Women’s College Collaboratory (CWCC) at DU and The Women’s Foundation of Colorado, found that raising the minimum wage will have a substantial positive impact on women and families.
Over half of the state’s minimum wage earners are women, so they have the most to gain from a wage hike.
But working women aren’t the only beneficiaries of a minimum wage increase. The report shows that raising the wage will increase Colorado’s Gross Domestic Product (GDP) by $400 million, significantly stimulating the state’s economy as a whole.
A major concern of those who oppose Amendment 70 is that struggling small businesses wouldn’t be able to withstand a wage increase, causing them to go out of business or lay off workers.
Tyler Sandberg, head of the Keep Colorado Working campaign, is at the forefront of the opposition. Sandberg told the Denver Post that a wage increase would be devastating for small business owners such as Janelle Sullivan, who owns a Littleton pottery studio. He says Amendment 70 would force her “to lay off the very low-wage worker this is supposed to help.”
According to the DU study, however, the effect on consumer prices and job losses will be minor. Consumer prices may rise by just .1-.2% yearly during the gradual increase, which is well below the 2% cost of living increase over the past generation.
This is an especially insignificant impact compared to how much the wage increase would boost earnings and consumer spending.
The incomes of approximately 290,000 women would increase, and one in five of all Colorado households would experience an income boost. Of those households, 200,000 have children.
This means Amendment 70 would ultimately help many working mothers and their families to rise above the poverty line.
The study also dispels concerns from the initiative’s opponents that raising the minimum wage would cause an increase in childcare costs, thereby negatively impacting families. The report shows that cost of living, rather than the minimum wage, drives the cost of childcare.
The minimum wage workforce is mainly comprised of earners over twenty years old. They make up 85% to 90% of the state’s lowest wage earners, while 35% are over 40 years old.
The full report can be found here.