With the passage of HB19-1210 in 2019, Colorado jurisdictions were able to raise their minimum wages beyond the state-mandated level. For a group of five municipalities in Boulder County—Boulder, Erie, Lafayette, Longmont, and Louisville—ECOnorthwest conducted a study to support decision-making about local minimum wages. Study components included existing conditions analysis for the five municipalities, a comparative analysis of other localities that have increased their minimum wage, a literature review, a regional minimum wage impact analysis, a dashboard with a general assessment of impacts, and an analysis of responses to a questionnaire conducted by the municipalities. We discussed and presented the results of the study at council meetings and study sessions for the five municipalities.
Our high-level characterization of outcomes for ten cities with recently enacted minimum wages suggests, consistent with the broader literature, that minimum wage increases are not necessarily associated with large, negative economic effects, and on net, the literature indicates that increases in the minimum wage can be an effective way to improve outcomes for low-wage workers. Our impact analysis estimates order-of-magnitude impacts to workers (e.g., employment and earnings), businesses (e.g., operating costs and business productivity), the region (e.g., poverty and GDP), and local governments (e.g., revenues and expenses). Overall, the available evidence and the study indicate that localities can successfully increase the minimum wage without causing great economic harm, but there are important tradeoffs to consider.
