Denver leaders propose citywide $15-an-hour minimum wage

By: Andrew Kenney | | The Denver Post

Denver is joining a national trend in considering raising its local minimum wage — the first city in Colorado to do so.

A proposal to be announced Thursday would raise minimum pay for workers in Denver to $15 an hour by 2021, according to Hancock administration spokesman Mike Strott.

Mayor Michael Hancock and Councilwoman At-large Robin Kniech are leading the proposal, which would have to be approved by the Denver City Council.

“Our residents are struggling to keep up with the cost of living in the face of a decade of wage stagnation, and all the housing policies in the world cannot make up for wages that don’t keep pace with our local costs,” Kniech said in an interview.

The statewide minimum wage will be $12 an hour in 2020, but a new state law allows counties and cities to set their own rates. Denver is the first municipality to move forward under the new law, according to the Colorado Municipal League.

The federal minimum wage hasn’t changed since 2009.

Nationwide, the idea of local minimum wages has spread amid rising living costs and slow wage growth. Only five municipalities set their own in 2012, but that number that has grown close to 50 today, according to UC Berkeley’s Center for Labor Research and Education.

“We are now in the longest period ever without an increase to the federal minimum wage,” said Sylvia Allegretto, co-chair of the Center on Wage & Employment Dynamics at Berkeley.

If the Denver law is approved this year, the first step of the wage increase could happen Jan. 1, according to city staff. A second increase in 2021 would bring wages to $15. Cities can only increase wages by a certain amount per year.

The change would affect more than 100,000 workers in Denver, according to a press release. Hancock and Kniech are planning a six-week public comment process and a potential vote in the next few months.

The debate is sure to raise questions about the effects on businesses and even workers.

“It’s going to have a huge impact,” said Sonia Riggs, president and CEO of the Colorado Restaurant Association, questioning whether the city would truly consider business concerns. Wages account for more than 30% of a typical eatery’s costs and most run a profit margin of only a few percentage points, she said.

“What business wouldn’t have trouble coping with that?” she said of the proposed change.

A National Bureau of Economic Research report on Seattle found that low-income workers might have lost money as their employers cut their hours. “This work could, in some circumstances, be automated or delegated to consumers,” read the nonprofit’s working paper.

But Allegretto’s work — she and colleagues recently studied six cities that had raised minimum wages to rates up to $13 an hour —  found no evidence of negative employment effects, even as low-wage workers received increases in pay. That mirrored earlier state and federal studies.

“You can always find businesses that will tell you that they’ll have to lay everybody off and close down, but we haven’t seen that happen,” she said.  A higher wage “helps with efficiency, it helps lower turnover, it increases productivity.”

Restaurant and retail workers would be among those most commonly affected, Allegretto said, along with early childhood educators and home health care workers.

Last year, Hancock raised the minimum wage for city employees and city contractors’ employees to $15 an hour.

Ron Ruggiero, president of SEIU Local 105, said Denver has been “at the forefront” of lifting wages, a movement he and others traced to fast-food workers’ “Fight for $15” activism starting in 2012.

Garhett Smith, 25, is on track for $15 at his airport job. His pay already has climbed from $11.10 to $13 an hour under Hancock’s earlier action.

So far, the extra money doesn’t feel like a “big help” in the face of rising costs, but he’s glad to see the citywide hike on the agenda, he said.

“Ask anyone: Most of us, it’s going toward rent,” Smith said. “And of course to start paying off some credit card debt, and starting some savings. Unfortunately, I don’t have (any) at the moment.”