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Point-counterpoint: Should Colorado voters approve Amendment 70, which would raise Colorado's minimum wage?

By: Richard Skorman and Mark Waller
October 1, 2016 Updated: October 1, 2016 at 10:42 pm
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Question: Should Colorado voters approve Amendment 70, which would raise Colorado's minimum wage from $8.31 per hour to $12 per hour by 2020?

Richard Skorman

Opponents of Amendment 70 argue it would hurt small businesses and kill jobs in the state. As small-business owners at Poor Richard's, Little Richard's and Rico's for over 40 years, Patricia (my wife and partner) and I know that's simply not true.

We have been paying our entry-level employees $12 and $13 per hour for seven years now, and our businesses have only grown and become more profitable. In fact, our labor costs have gone down. Why?

Now that we pay a living wage (with benefits), we attract the best employees. They stay with us much longer, and the longer they stay, the better they become at their jobs. It's been our experience that long-term employees can do the work of 11/2 high-turnover employees.

It's also a plus that we spend less money on training new employees. Training is the most expensive labor cost there is, and most employees making $8 per hour will quickly leave for other opportunities with more pay.

Most important, our staff is happier. A happier staff simply means more regular customers. The key to our success and that of most small businesses are regular customers. Regular customers like knowledgeable and, most of all, happy employees.

So I am sure your next question is, "Why don't you pay your employees more and not force others to do it as well? No one is requiring you to pay less." The answer is that we think it would help level the playing field for small businesses like ours.

When we started our restaurant in 1977, there were 20 restaurants downtown. Now there are 60, including many national chains. When we started our bookstore, it was before Amazon and the Kindle; we opened our toy store before Walmart had 20 rows of toys.

Not only can the chains and internet businesses undercut us because they have lower labor costs and higher buying power, but most internet businesses don't charge sales tax as we're required to. Internet customers and national chain customers don't have to pay for parking like ours. When you add it all up, it's not easy for a brick-and-mortar store to compete.

Our main advantage is our experienced and happy sales staff.

Patricia and I aren't alone in our beliefs. More than 8 in 10 small-business owners already pay their employees more than the minimum wage. A UC Berkeley study found that employment rates hardly changed in states and cities that raised the minimum wage because small-business owners experienced lower turnover and higher worker productivity after the raise.

A recent DU study reports that raising Colorado's minimum wage to $12 by 2020 would pump 400 million new dollars into Colorado's economy while having minimal impacts on inflation or employment.

We hope some of that money comes our way because of our experienced and happier staff.

Mark Waller

Colorado voters should think twice before voting for Amendment 70, which would increase the minimum wage 44% in four years.

On the surface, Amendment 70 seems like a good idea that will raise the standard of living for the most disadvantaged in our society, but the negative consequences far outweigh any potential positive impact.

The single greatest argument in favor of increasing the minimum wage is that it will raise the standard of living for minimum-wage workers. The idea is that if we raise the minimum wage, workers on the low end of the wage spectrum will now earn enough, according to the official argument in favor, to achieve a "basic standard of living."

Unfortunately, that isn't the case. Raising the minimum wage will do nothing to increase the standard of living for the workers it is meant to help. In some cases, it will actually lower their standard of living.

Labor is a significant factor that helps determine the cost of goods and services. If the cost of labor increases, the cost of goods and services will no doubt increase as well. The most likely result is that additional costs will be passed on to the consumer.

The industries that employ the most entry-level wage earners include retail, food service, and child care, to name a few. If businesses within these industries have to raise wages 44%, consumers, including those on the low end of the wage spectrum, will end up paying 44% more for those goods and services. Ultimately, this means those making minimum wage are earning more but getting less value for their money.

Patty Kupfer, spokesperson for Colorado Families for a Fair Wage, said, "All studies show that when working people have more money in their pockets, they spend it." She is correct.

Unfortunately, they will be spending it on more expensive day care, food and clothing.

Besides passing the higher cost of labor on to consumers, businesses will have another option: they could cut labor costs. Most likely, that will mean cutting hours, laying employees off, or reducing benefits, causing even more harm to the population Amendment 70 is supposed to help.

Increasing the minimum wage will have an even greater detrimental impact on small businesses than on large businesses. Oftentimes, small businesses are already operating on very thin margins. Changes in the cost of labor may be the difference between staying in business and going under. This is particularly true in rural Colorado, where it's even harder for small businesses to absorb the higher cost of labor.

Because small businesses are the economic engine that drives our economy, the ripple effect of Amendment 70 could be devastating for Colorado's economy as a whole. A "no" vote is the way to go on Amendment 70.

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Richard Skorman is co-owner of Poor Richard's Restaurant, Poor Richard's Books and Gifts, Little Richard's Toystore and Rico's Café and Wine Bar. Mark Waller represents District 2 on the El Paso County Board of County Commissioners.

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