Dollar dilemma (10-6-06)

Opinions vary on the effect of proposed minimum wage hike

Talk to the myriad of people campaigning on both sides of a proposed ballot question that could affect Colorado's economy, and you'll find a barrage of differing opinions.

Ron LaSalle, owner of the Golden Cavvy Restaurant & Lounge, is among those who have reservations about Amendment 42.

The bill, if approved, would raise the state's minimum wage from $5.15 per hour to $6.85 per hour. The bill would also raise the wage for tipped employees from $2.13 per hour to $3.83 per hour, plus gratuity.

"I don't see where it does anything," said LaSalle, owner of the restaurant for the past 11 years. "All it does is raise everybody's prices. ... I'd like to pay all my employees double, but to do that, I'd have to double my prices."

LaSalle, who employs 22 people, said the wage increase would raise costs for small-business owners like him, which would trickle down to the prices he charges and to the customers paying them.

"The point is, it'll hurt people," he said. "It'll put a lot of restaurants under. ... The inflation spiral would be worse than $3 gas."

The last increase to the minimum wage in Colorado came in 1997 when Congress raised the federal level from $4.75 to $5.15. Colorado is one of five states proposing a minimum wage increase to voters this November; 23 states have increased their minimum wages in the past nine years.

If approved, the question would amend the state constitution.

Proponents and opponents agree that the minimum wage increase would have the greatest impact on the food service, a $20 million a day industry in Colorado.

Jeannette Galanis, campaign manager for the Coloradoans For A Fair Minimum Wage committee, said it's nearly impossible for a low-paid worker to make ends meet.

"To be able to survive, you actually need to be working two minimum wage jobs," Galanis said.

She said voters have responded with support to the proposal.

"We're getting an overwhelming reception," she said. "It's beyond positive. It seems large chunks of Colorado voters believe it's been far too long."

Jan Rigg, a spokeswoman for the Respect Colorado's Constitution committee, which represents about 30 statewide organizations and media outlets, as well as 42 public officials, said Amendment 42 would increase labor costs resulting in higher prices for consumers, cause immediate layoffs for thousands of employees and could effectively put small businesses out of business.

She said her coalition believes the proposal should not be placed in the state constitution.

"The constitution is not the place for fiscal policy," Rigg said.

The group also contends that the majority of minimum wage workers live with their parents and/or are single and between the ages of 19 and 24 years old. Plus, the minimum wage was not "meant to be a living wage," rather an entry-level salary for workers looking for a beginning opportunity in the work force.

According to the Community Indicators Project, a report detailing social, economic, environmental and civil trends in the Yampa Valley for 2005-06, the living wage for an individual in Moffat County is $12.08 an hour and $13.17 an hour in Routt County. Most service sector jobs pay less than the living wage, according to the report.

Rich Jones, the director of policy and research for the non-partisan Bell Policy Center, authored an analysis brief regarding Amendment 42. The policy center has endorsed the proposal.

"Our stance is, we can make the increase without causing job loss or hurting business," Jones said.

He said that 138,000 Colorado workers would earn more if the state adopts a higher minimum wage. His report also attempts to dispel the perception that only teenagers work minimum wage jobs.

"By more than 2-to-1, these low-wage earners are adults," Jones said in a summary on his research. "They work in service, retail and hospitality sectors, from 20 to 40 hours a week.

"Most importantly, about 20 percent of these workers are raising kids, and half of those families count on the low-wage workers' earnings for all of their income. If Colorado voters pass Amendment 42, 57,000 kids will benefit from their parents getting a raise."

According to the state's legislative council, the measure has pros and cons.

Among the benefits to raising the minimum wage, according to an analysis booklet on 2006 proposals, are ensuring that more full-time workers will earn more than the $10,700 a year poverty level and it could benefit both businesses and workers by increasing morale and productivity, while reducing turnover and absenteeism.

Drawbacks include the possibility of hurting the economy due to businesses responding to the wage hike by raising prices and hiring fewer workers, employers hiring fewer less-skilled and inexperienced workers, and, because the bill proposes to change the state constitution, it would be difficult to respond quickly to future and economic labor conditions.

Joshua Roberts can be reached at 824-7031, ext. 210, or jroberts@craigdailypress.com.

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