Colorado Becomes 1st State to Drop Minimum Wage

Meredith Jessup | January 01, 2010 10:14 PM

As a sign of dire economic times (and proof conservatives are right yet again), Colorado will be the first state to decrease its minimum wage -- an unheard of action since the state first adopted a minimum wage law in 1938.

AP reports:

Colorado's wage is falling 3 cents an hour, from $7.28 to the federal level of $7.25. That's because Colorado is one of 10 states that tie the state minimum wage to inflation. The goal is to protect low-wage workers from having unchanged paychecks as the cost of living goes up.

But Colorado's provision also allows wage declines, and the state's consumer price index fell 0.6 percent last year, so the minimum wage is going down.

The lower consumer price index, attributed to lower fuel prices, would have forced the wage down 4 cents an hour, but no state can go below the federal minimum of $7.25.

As inflation continues to rise, 14 states and the District of Columbia will continue to keep their minimum wages above the federal level. Other states with adjustable minimum wages aren't expected to drop their wage levels; in many states that tie wages to inflation, minimum wages have already met the federal minimum and can go no lower.

In Florida, for example, a declining consumer price index would drop the wage 4 cents to $7.21. But that's less than the federal minimum wage of $7.25 an hour, so paychecks won't change for Florida's lowest-paid workers.

Hmm... what happens when government artificially inflates wages and the markets aren't allowed to dictate worker pay?