Colorado drops minimum wage to meet deflationary times

sweat shop labor
As predicted by many knowledgeable economists and financial pundits, states suffering rapid declines in revenues, taxes, and suffering from rapid deflationary problems that the credit crisis is bringing, Colorado has become the first state to lower its minimum wage in efforts to obey the law of supply and demand. What do policy makers expect when they ship the productive capacity of their nation to slave labor countries like China or Mexico? Inevitably your labor standards and wages have to drop to meet those at the bottom, or you risk losing your competitive edge.

Are Americans ready to begin living in grass huts like many of the poor people do in China? I suppose only time will tell.

Colorado minimum wage to drop as living costs fall


DENVER — Colorado will become the first state to reduce its minimum wage because of a falling cost of living.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That’s lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour.

Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up.


“We can’t see that there would be any other option” except lowering the wage, department spokesman Bill Thoennes said Tuesday. He said there will still be a public hearing on the question in early November, though the drop appears inevitable. The lower wage will take effect Jan. 1.

Advocacy groups for the poor have been warning of the wage drop since August, when the consumer price index for the Denver area was released. The index fell 0.6 percent between the middle of 2008 and the middle of 2009, mostly as a result of falling fuel prices.

Other states with adjustable minimum wages have seen their consumer price indexes fall, such as Ohio. But Colorado is one of the few states where the law is interpreted to mean the wage can fall. Other states are planning to keep wages flat.

In Florida, deflation would reduce the minimum wage to $7.21, but the state’s minimum wage already matches the federal wage, so Florida workers’ paychecks won’t change.

Other states with minimum wages that rise with inflation are Arizona, Missouri, Montana, Nevada, Oregon, Vermont and Washington.

Colorado voters approved an adjustable minimum wage in 2006. Supporters of that amendment said they did not intend for wages to fall, but the provision allowing it to fall was crucial to its passage. They have pointed out employers of the estimated 50,000 to 70,000 Coloradans making minimum wage are free to leave wages flat.

See the full length article at The Associated Press

4 thoughts on “Colorado drops minimum wage to meet deflationary times”

  1. I made a 1.65 on my first job in 1968. I could buy about 6 gallons of gas (.28/gal) for one hour of work. Today 6 gallons cost around 15.00. So at 7.25 an hour, a minimum wage worker has about half the purchasing power of his counterpart in 1968.

    If you use the coffee index, 10 cents a cup in 1968, the disparity is even more extreme. Most places charge 2.00 for a cup of coffee now. That’s a 2,000% increase.

    The 1968 vs 2009 minimum wage is only a 440% increase.

    The working folks are sliding backwards at an accelerating pace. We need to pull a “Ghandi” on the Banksters. Sit on our butts until they restore value to our labor.

  2. I too am in that classification. My first job was $1.60 an hour. My house payment was $73.19 a month including taxes and insurance. My gas was 29.9 and quite often would go down to 18.9 in a gas war. Cigarettes were 35 cents a pack. You did not have all these fees, surcharge and funds gouging you on top of the service you were paying for.

    I lived better back then than I do now at $500 a week. I have been saying it’s time the people take their country back and remember how it was done in 1776. In the meantime all of my cash is in gold and silver as the dollar will soon be worthless.

  3. Even $7.50 is not a living wage..a decent living wage today would have to be something over $10 and hr or more. How can anyone live on less ? They would have to not have any kids, both spouses work full time to barely make it. There is no way with kids, as daycare costs a fortune, and food stamps don’t go far.

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