PRIORITY

Raising the Minimum Wage

The minimum wage should be a living wage for all Americans regardless of race, religion, creed, gender, or zip code.

The federal minimum wage is a vital tool to ensure livable wages for full-time workers. The last federal minimum wage increase occurred almost ten years ago in July 2009, and we are past due for an increase.

When Governor Hickenlooper supported a ballot initiative to raise the minimum wage in Colorado, he said, “I’m not sure there’s another way to help move more people out of poverty than to raise the minimum wage… I think in this county, if you work 40 hours a week, and you work hard you ought to be able to afford an apartment.” [1]

A single parent making the federal minimum wage and working full-time would make $15,080 annually, an amount that is below the poverty line for a family of two. [2] Every 10% increase in minimum wage reduces poverty rates in the African-American and Hispanic communities by 10.9% [3] and would reduce the number of people living in poverty by 2.4%. [4]

As President, Hickenlooper will raise the minimum wage to a nationwide floor of $15/hour by 2024, and he will also permanently tie the minimum wage to cost of living. Moving forward, the minimum wage must always be a living wage. In some high cost-of-living areas today, we need to go even higher than $15/hour in the very near future.

Setting a nationwide floor of $15/hour

Large metropolitan areas and geographies with higher costs of living will be moved to $15/hour by 2021, followed by mid-size and mid-costs cities and then finally all communities nationwide will be at $15/hour by 2024.

  • MSAs in the top 25th percentile of cost-of-living based on RPP data will transition to $15/hour by 2021
  • MSAs in the second 25th percentile of cost-of-living based on RPP data will transition to $15/hour by 2022
  • MSAs in the third 25th percentile of cost-of-living based on RPP data will transition to $15/hour by 2023
  • MSAs in the fourth 25th percentile of cost-of-living based on RPP data will transition to $15/hour by 2024

Regional Price Parities (RPP) is an index that measures the differences across regions in the prices of goods and services. In other words, it’s a measure of comparative purchasing power across MSAs, determined by the Bureau of Economic Analysis.

Tying the minimum wage to cost of living

Hickenlooper will index the minimum wage to an area’s cost of living, guaranteeing that the minimum wage will rise in conjunction with the increased prices of goods and services. We must never again allow the minimum wage to lag so far behind productivity, keeping millions of hard-working Americans in poverty.

Data from the Department of Commerce, specifically the Census Bureau and the Bureau of Economic Analysis, will be used to determine the appropriate peg for the minimum wage increases going forward.

  • Metropolitan Statistical Areas (MSAs, as designated by the US Census) would be sorted into four groups based on their most recent RPP data.
  • Every three years the minimum wage would be adjusted, tracking changes in the prices of regional goods and services, based on increases in the average hourly wage of private sector, non-supervisory workers — modeling a similar bill that US Rep. Terri Sewell (AL-07) recently introduced in the House.

Seventeen states currently index their minimum wage based on cost of living increases and/or consumer price index increases. [5]

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