Minimum wage in Colorado rises 28 cents in 2012, helping an estimated 74,000 workers. Minimum wage hike 'makes huge difference,' says former financial analyst.
Nathan W. Armes/Reuters/File
Kelly Wiedemer used to make $31 an hour as a financial analyst. Now she makes minimum wage working at a convenience store, and she says the slight hike in Colorado's minimum wage is a big help.
Colorado's minimum wage is now $7.64, an increase of 28 cents that took effect Sunday because the state links minimum wage to inflation.
"Having experienced this working-poor thing for the first time, the wage increase makes a huge difference," said Wiedemer, a 46-year-old Westminster resident who started working at a convenience store in October when her unemployment benefits ran out.
"It helps to offset lost spending power," she said.
Colorado's minimum wage also rose last year. Colorado is one of eight states that link minimum wage to inflation. In 2010, a lowered Consumer Price Index in Colorado caused a reduction in the minimum wage, to the federal minimum of $7.25.
Wiedemer said the extra money will help make up for rising food costs.
"This is a step in the right direction, but it is not a living wage by any means," she said. "It helps low-wage workers from falling further behind."
However, restaurant owners are worried about paying the extra money.
Peter Meersman, president and chief executive of the Colorado Restaurant Association, told the newspaper owners are also being squeezed by higher food prices.
"It is a double whammy for the restaurants," he said.
Meersman said restaurants are hesitant to raise their prices because consumers remain sensitive to increases. And with profit margins thin, 3.5 percent on average, restaurants aren't in a position to absorb the higher costs either.
On a percentage basis, the 28-cent increase represents 6.5 percent on the tip wage, currently at $4.34 an hour.
"We are hearing from our members, and they are not happy with it," he said.