Late last year, the Colorado Department of Labor and Employment announced that the minimum wage for non-exempt employees will be increased from USD 7.64to USD 7.78 per hour, effective January 1, 2013. In addition to this, the minimum wage for ‘tipped employees’ was also increased from a USD 4.62 to USD 4.76 per hour – with a maximum per hour obligation for tip credit employers to meet their minimum wage requirement would continue to remain at 3.02 USD per hour.
In addition to Colorado jobs, the change in minimum wages also impacted the market of Missouri, Vermont and seven other states.
Colorado versus the United States
Since January 1, 2013 almost a million low-wage workers across the United States saw a rise in their earnings which came as a result of the state-wise cost of living adjustments that were made after taking into consideration inflation.
In comparison to the 7.78 USD per hour paid out for minimum wage Colorado jobs, Washington State continues to pay the highest minimum wage in the United States – at 9.19 USD per hour, which is 15 cents higher than last year. Other states that experienced a rise in minimum wages include – Arizona, Missouri, Ohio, Montana, Rhode Island, Oregon and Vermont.
The Need to Increase Minimum Wage
While many people argue that considering the economic scenario, the increase of minimum wage rates may have a negative impact of certain industries, long-term analysis suggests otherwise.
- Stimulating the Local Economy – Increasing the minimum wage at this point could not be more important for the state economy. The increase in wages consequently results in a stimulated economy which encourages consumer spending and reducing liabilities on the Colorado state as well as federal budgets.
- Empowering Citizens – It is a known fact that consumer spending drives about 70 percent of the economy – and, increasing the demand is a simple way to give production the Colorado jobs market boost.
- Increasing Spending Power- By putting money back into the pockets of low-income consumers, one is facilitating a circulation of monies within an economy, hereby aiding its growth. A number of studies performed by economists at the Federal Reserve Bank suggest that with every 1 dollar that was increased the minimum wage in a year, the government is initiating a boost of USD 2,800 in consumer spending per low-wage worker in the oncoming year.
- Minimal Liability on Tax Payers – By empowering low wage work force with the spending power, state and federal governments are able to encourage the development of a sustainable economy with minimal liability on tax payers.
With the current economic turmoil in all parts of the United States, a larger number of families are forced to rely on low-income or minimum wage jobs to sustain. The job losses experienced during the recession a few years ago was worst hit in sectors such as – manufacturing, finance and construction and new jobs have cropped up in low wage jobs belonging in retail, sales, cashiering and food preparation profiles. By encouraging the growth of these job profiles is a start to Colorado State’s economic growth and overall financial uplifting of the nation.