HomeMy WebLinkAboutMemo - Mail Packet - 4/25/2023 - Memorandum From Ginny Sawyer Re: Work Session Summary – April 11, 2023 Local Minimum Wage
City Manager’s Office
City Hall
300 LaPorte Ave.
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
Date: April 20, 2023
To: Mayor and City Council
From: Ginny Sawyer, Policy and Project Manager
Thru: Kelly DiMartino, City Manager
RE: Work Session Summary – April 11, 2023 Local Minimum Wage
Mayor Arndt, Mayor Pro Tem Francis and Councilmembers Canonico, Pignataro, and Ohlson
were present. Councilmembers Peel and Gutowsky participated remotely.
Staff provided updated information based on recent outreach and regional efforts. The wage
scenarios presented remained the same from November 2022, however, Council also received
a recommendation from a resident (referred to in the conversation as Option 3.) Attached.
The conversation included support to bring an ordinance on May 16, 2023 that includes the
Option 3 and one other. There were also numerous questions that staff will work to address
including:
- What happens to benefit cliff information at less than 40 hours a week?
- Provide cost of living to wage analysis similar to data provided in this article from
Councilmember Canonico (https://smartasset.com/data-studies/cities-with-the-highest-
and-lowest-real-minimum-wage-2023)
- Are tipped wages a Federal or State requirement?
- Show information on City’s move to $15/hour.
- What data do we have on employee commuters (both in and out of city?)
- Show comparisons of national vs. local wages in similar industries.
- What data do we have on who the minimum earners are?
Next Steps:
- Staff will work on providing information and analysis on the above questions.
- An ordinance with 2 possible options will be brought on May 16.
- May 16 materials will include previous material that addressed minimum wage benefits.
DocuSign Envelope ID: 0A7A6BFC-5732-4887-BB97-19B2F1865BB1
RE: Minimum Wage at the April 11th, 2023 Work Session
Between the November 15, 2022 work session, and now, city staff performed additional outreach with
the goal of reaching the lowest income earners, as they had not been targeted and/or reached in
previous outreach efforts.
City staff also performed a benefit cliff analysis to determine the potential negative impacts a minimum
wage increase could have.
Importantly, the outreach performed by the city, nor the analyses conducted by the city, sought to
determine, or quantify the overwhelmingly positive impacts that increasing the minimum wage has
consistency been shown to achieve (discussed throughout the July 12th packet, and September 6th
packet, highlights included below).
The attached document outlines Colorado and Denver’s minimum wage increases for both standard
and tipped workers. It also shows the two options proposed by city staff (originally proposed on
November 15, 2022).
In 2019, Denver passed an ordinance to increase minimum wage to $17.29 an hour by 2023 ($14.27
for tipped workers). This resulted in an increase of $6.19 over four years (average of $1.55/year,
however Denver instead chose to increase by a greater dollar amount in the first two years). After
2023, Denver’s minimum wage would increase by the prior year’s increase in the regional CPI every
year thereafter (more info here).
Option 1 proposed by Fort Collins city staff was based on feedback by City Council at a September
2022 work session ($18.50 by 2026). Option 2 was based on feedback from businesses ($16.65 by
2026). No options have been proposed based on feedback from minimum wage workers and
our community’s lowest earners.
In response, we propose a third option that is halfway in-between options 1 and 2 ($17.29 by 2026).
The minimum wage of $17.29 an hour ($14.27 an hour for tipped works) is th e target wage that
Denver set and reached this year (2023). This would require Fort Collins to raise wages $3.64 over
three years ($1.22 per year) which is a slower rate than Denver achieved. Additionally, the state
wages increase $1.56 in that same time period, meaning the additional increase is only $2.08 over
three years ($0.69 per year).
Of note, starting this year, the city pays $15 minimum wage for all jobs. In option 3, a $15 minimum
wage wouldn’t be reached until 2025 (and 2028 for tipped workers).
Unlike many of the more privileged members of our community, minimum wage workers often don’t
have the time to be engaged in city politics, and we need to ensure their voice is heard. While we
understand the challenges that staff face in reaching minimum wage work ers, our city’s lowest
earners, and those most strongly impacted by low wages, we hope city council can advocate for t hem.
Thank you,
Emily Gallichotte
Comments from July 12th Packet of “Consideration of a Local Minimum Wage” (link)
Existing research indicates that a higher local minimum wage generally does not lead to job losses or
higher prices, but it does increase worker earnings and employee retention (page 30)
Approximately one -quarter of the Fort Collins workforce would benefit from a 15/hour minimum wage
(page 30)
These jobs are primarily concentrated in the service sector – food service, retail, accommodations,
personal care (page 30)
Evidence points to increases of a local minimum wage having a minimal impact on employment levels
(page 34)
Overall, increases have a minor but positive effect on worker earnings (page 34)
Research indicates that increases to minimum wage do not drive higher prices in most sectors,
including grocery, gas, retail chains, drugstores (page 34)
Research generally finds that a higher local minimum wage reduces employee turnover and increases
employee retention (page 35)
Leads to improvements in job quality and worker attachment (page 35)
Comments from September 6th Packet of “Consideration of a Local Minimum Wage” (link)
Economic & Planning Systems, Inc Report (begins on page 66)
The research on local minimum wage policies shows that increasing the minimum wage generally
does not have a negative impact on employment and does not lead to overall job loss (page 67).
The research studies reviewed indicate that a higher minimum wage will translate to an increase in
total net earnings (page 68).
The studies reviewed indicate that raising the local minimum wage does not increase overall prices in
most sectors, including grocery, gas, general retail and drugstores, but does not lead to increased
prices as restaurants (page 69).
The studies reviewed indicate a higher minimum wage leads to reduced rates of employee turnover
and greater employee retention, benefitting both employees, who see increased job stability, and
businesses, who incur reduced costs associated with employee turnover (page 70).
year CO increase ($)increase (%)year CO increase ($)increase (%)
2019 $11.10 ------2019 $8.08 ------
2020 $12.00 $0.90 8.1%2020 $8.98 $0.90 11.1%
2021 $12.32 $0.32 2.7%2021 $9.30 $0.32 3.6%
2022 $12.56 $0.24 2.0%2022 $9.54 $0.24 2.6%
2023 $13.65 $1.09 8.7%2023 $10.63 $1.09 11.4%
2024 $14.33 $0.68 5.0%2024 $11.31 $0.68 6.4%
2025 $14.76 $0.43 3.0%2025 $11.74 $0.43 3.8%
2026 $15.21 $0.45 3.1%2026 $12.19 $0.45 3.8%
2027 $15.66 $0.45 3.0%2027 $12.64 $0.45 3.7%
2028 $16.13 $0.47 3.0%2028 $13.11 $0.47 3.7%
2029 $16.62 $0.49 3.0%2029 $13.60 $0.49 3.7%
2030 $17.11 $0.49 3.0%2030 $14.09 $0.49 3.6%-100 -100
year CO Denver increase ($)increase (%)year CO Denver increase ($)increase (%)
2019 $11.10 $11.10 ------2019 $8.08 $8.08 ------
2020 $12.00 $12.85 $1.75 15.8%2020 $8.98 $9.83 $1.75 21.7%
2021 $12.32 $14.77 $1.92 15.0%2021 $9.30 $11.75 $1.92 19.5%
2022 $12.56 $15.87 $1.10 7.5%2022 $9.54 $12.85 $1.10 9.4%
2023 $13.65 $17.29 $1.42 9.0%2023 $10.63 $14.27 $1.42 11.1%
OPTION 1, $18.50 by 2026 - established based on September 2022 council feedback
year CO Fort Collins increase ($)increase (%)year CO Fort Collins increase ($)increase (%)
2023 $13.65 $13.65 ------2023 $10.63 $10.63 ------
2024 $14.33 $15.15 $1.50 11.0%2024 $11.31 $12.13 $1.50 14.1%
2025 $14.76 $16.90 $1.75 11.6%2025 $11.74 $13.88 $1.75 14.4%
2026 $15.21 $18.50 $1.60 9.5%2026 $12.19 $15.48 $1.60 11.5%
2027 $15.66 $19.06 $0.56 3.0%2027 $12.64 $16.04 $0.56 3.6%
2028 $16.13 $19.63 $0.57 3.0%2028 $13.11 $16.61 $0.57 3.6%
2029 $16.62 $20.22 $0.59 3.0%2029 $13.60 $17.20 $0.59 3.6%
2030 $17.11 $20.82 $0.60 3.0%2030 $14.09 $17.80 $0.60 3.5%
OPTION 2, $16.65 by 2026 - established based business feedback
year CO Fort Collins increase ($)increase (%)year CO Fort Collins increase ($)increase (%)
2023 $13.65 $13.65 ------2023 $10.63 $10.63 ------
2024 $14.33 $14.65 $1.00 7.3%2024 $11.31 $11.63 $1.00 9.4%
2025 $14.76 $15.65 $1.00 6.8%2025 $11.74 $12.63 $1.00 8.6%
2026 $15.21 $16.65 $1.00 3.4%2026 $12.19 $13.63 $1.00 7.9%
2027 $15.66 $17.15 $0.50 3.0%2027 $12.64 $14.13 $0.50 3.7%
2028 $16.13 $17.66 $0.51 3.0%2028 $13.11 $14.64 $0.51 3.6%
2029 $16.62 $18.19 $0.53 3.0%2029 $13.60 $15.17 $0.53 3.6%
2030 $17.11 $18.74 $0.55 3.0%2030 $14.09 $15.72 $0.55 3.6%
year CO Fort Collins increase ($)increase (%)year CO Fort Collins increase ($)increase (%)
2023 $13.65 $13.65 ------2023 $10.63 $10.63 ------
2024 $14.33 $14.86 $1.21 8.9%2024 $11.31 $11.84 $1.21 11.4%
2025 $14.76 $16.07 $1.21 8.1%2025 $11.74 $13.05 $1.21 10.2%
2026 $15.21 $17.29 $1.22 7.6%2026 $12.19 $14.27 $1.22 9.3%
2027 $15.66 $17.81 $0.52 3.0%2027 $12.64 $14.79 $0.52 3.6%
2028 $16.13 $18.34 $0.53 3.0%2028 $13.11 $15.32 $0.53 3.6%
2029 $16.62 $18.89 $0.55 3.0%2029 $13.60 $15.87 $0.55 3.6%
2030 $17.11 $19.46 $0.57 3.0%2030 $14.09 $16.44 $0.57 3.6%
These numbers are flexible and can increase at any proposed values to reach the 2026 goal
(not to exceed more than $1.75 or 15% any given year)
red denotes maximum increase ($1.75 or 15%, whichever is greater)
STANDARD WAGES TIPPED WAGES
relative to prev yr, Denver relative to prev yr, Denver
Denver minimum wage increase
Established in 2019 to increase to $17.29 by 2023 ($14.27 for tipped workers), then increase by the prior year’s increase in the
regional CPI every year thereafter. Increase of $6.19 over four years (avgs $1.55/yr x 4)
($3.02 less than non-tipped wages)
Colorado minimum wage increase
The city pays $15 minimum wage for all jobs starting in 2023.
relative to prev year, FoCo
relative to prev year, CO relative to prev year, CO
PROPOSED MINIMUM WAGE INCREASES
We propose $17.29 ($14.27 for tipped workers) by 2026 (same target MW as Denver, however 3 years behind their schedule). This
splits the difference between options 1 and 2, and gives 3 years for a $3.64 increase ($1.22/yr x 3), $2.08 more than what the state is
increasing in that time period (CO increases $1.56 in that time period).
relative to prev year, FoCo
Proposed by Fort Collins city staff on November 15, 2022
relative to prev year, FoCo
relative to prev year, FoCo
relative to prev year, FoCo relative to prev year, FoCo