Re: “Going too far on minimum wage?” April 4 editorial ( ).
Bloomberg View’s editorial bemoaned that raising the minimum wage “seems to be catching on,” as if the idea were some quirky new fad like artisanal ketchup or “man-bun” hairdos.
It’s not. Regular and modest increases to the minimum wage are a tried-and-true practice, but we haven’t been keeping up lately.
Congress has raised the minimum wage 22 times in the nearly 80 years since it was created. But the federal minimum wage of $7.25 per hour is now only two-thirds the real value it was back in 1968, and Colorado’s minimum wage, at $8.31 per hour, is only three-fourths its historic value.
Had federal and state minimums kept pace with inflation since 1968, they would now be $11.12 per hour.
That’s why raising the Colorado minimum wage to $12 by 2020 is a modest step: The state minimum wage would actually be $12.13 by 2020 if it kept up with inflation since 1968.
The Bloomberg editorial suggests studies on raising the minimum wage are “inconclusive.” It’s quite the opposite. A landmark 1993 study showed modest increases to the minimum wage had either negligible or no impacts on unemployment. A 2009 review of 61 research papers showed the same thing. So did studies in 2010 and 2013.
But isn’t the best way to raise wages by educating workers, thus making them more productive, as the Bloomberg editorial says? The problem is workers are much better educated and more productive than they were in prior decades but still aren’t seeing work rewarded.
In 1968, only 17 percent of workers in the lowest 20 percent of the wage distribution had a college education, compared to 46 percent today. Workers are also twice as productive as they were in 1968.
The minimum wage used to be relatively higher. In 1968, the minimum wage was 52.1 percent of the national median wage. The minimum wage in Colorado today is only 41 percent of the national median wage.
By raising the minimum wage to $12 by 2020, we’d just be following our traditions.
Chris Stiffler is an economist at the Colorado Fiscal Institute.
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