Minimum Wage in Colorado to Drop to $7.24 from $7.28
When a law was passed in 2006 in the state of Colorado that called for the minimum wage to be adjusted for inflation, many people didn't entertain the possibility of deflation actually lowering the minimum wage.
We've had mostly moderate inflation over the past 30-40 years, with nary a sign of deflation.
We've had double digit inflation and very modest inflation during that time, but never any deflation.
When this law was passed in Colorado in 2006, most people didn't envision that the day would come when deflation actually lowered the minimum wage in the state.
However, this is exactly what will take place in 2010, as Colorado will lower its minimum wage from $7.28 down to $7.24.
The federal minimum wage is $7.25, meaning that virtually all minimum wage workers in the state will make $7.25.
Rich Jones of the Bell Policy Center, a group that was instrumental in implementing the inflation-adjusted minimum wage as a way of protecting lower-income people from inflation, said that "he hoped employers would choose not to lower wages for their poorest workers even though state law will in all likelihood allow them to do so."
According to the New York Times, there are a total of 10 states that have tied their minimum wage to inflation. They include Nevada, Ohio and Florida.
It only seems fair to me that if you are going to tie your minimum wage to inflation, then you should be prepared to have a lower minimum wage if there is deflation.
Besides, deflation means that the buying power of a dollar increases, meaning that people should notice no difference in terms of how far their paychecks stretch every month.
Seems fair to me, no?
Source: New York Times - Colorado Plans to Lower Minimum Wage in 2010
Photo: Kevin Walter
Filed under: General Knowledge