This past session in the Senate, I introduced a bill that got little attention. Short and to the point, it said that the Vermont minimum wage, which is tied to CPI, would not go down in the event of a decline in the CPI. Some laughed when they saw this bill because it’s been decades since CPI went down in the United States.
It gives me no pleasure that CPI did indeed go down this past year, which means under normal circumstances Vermont’s lowest wage workers would have seen an already too-low minimum wage decline still further at the worst possible economic time.
My bill, which was folded into the Senate Economic Development bill, and which ultimately became law, helped protect Vermont’s low wage workers from suffering a decline in their earnings.
If there’s any doubt about the potential for these workers to slide into still greater inequality, read this from the Denver Post…
Colorado’s minimum wage is set to decline next year due to a decrease in the inflation rate during the first half of the year, according to an order from the Colorado Department of Labor and Employment.
The new order would lower the state’s current hourly minimum of $7.28 to $7.24 on Jan. 1.
Most employers, however, will still have to meet the federal minimum wage, which rose to $7.25 in July.
For a full-time worker, going from $7.28 to the federal hourly minimum will result in a loss of $62.40 in income during the course of a year.
“For the people really working at the minimum wage, even though it is a small amount of money, it means a lot to them,” said Rich Jones, director of policy research at the Bell Policy Center in Denver.
For tipped workers in Colorado, the minimum will go from $4.26 per hour to $4.22 per hour, an amount above the federal minimum for tipped income of $2.13 an hour.
The Colorado Restaurant Association, which lobbied against linking the minimum wage to inflation, isn’t directing members one way or the other on adjusting wages, said Peter Meersman, the group’s chief executive officer and president.
“Each individual employer will decide that,” said Meersman, who called the downward adjustment a surprise.
Jones said he hopes employers will focus more on maintaining goodwill with their workers rather than lowering wages because they can.
The state minimum wage is based on a formula contained in the state constitution after the passage of Amendment 42 in 2006.
The minimum wage rate is recalibrated each year based on the Denver-Boulder-Greeley Consumer Price Index, which fell 0.6 percent between the first half of 2008 and the first half of 2009. Last year, that index rose 3.9 percent, but it is now on track to record its first annual decline since its start in 1965.