Colorado Minimum Wage to Increase

In the state of Colorado, the Denver-area inflation rate for the first half of this year was 3.7 percent, which was propelled by rising energy costs. It's not just another economic statistic: Thanks to a 2006 ballot issue, Colorado uses the measure to set the state's minimum wage.

Colorado’s minimum wage is currently $7.02 per hour. It will increase to $7.28 per hour on Jan. 1, the Rocky Mountain News calculates, based on the Colorado Department of Labor's rules. For tipped employees, like restaurant workers, the minimum wage will increase from $4 to $4.26 per hour.

A spokesman for the Colorado Department of Labor, Bill Thoennes, said the agency must consult with federal economists and conduct a rules hearing before formally announcing the change, which is based on the Denver-Boulder-Greeley Consumer Price Index; the index measures price increases from the first half of 2007 through the first half of 2008.

The federal Bureau of Labor Statistics calculates the local inflation rate. The bureau said energy prices, which include prices for vehicles and heating and cooling the home, rose 19 percent. In the prior year, energy costs actually declined 0.6 percent. Taking out the massive jump in energy costs, the CPI for Denver rose 2.6 percent.

The CPI increase means another round of cost increases for businesses, particularly for those small businesses, like restaurants. For instance, the wage for tipped employees will increase to $4.26 per hour, a 6.5 percent higher wage than the current $4 per hour.