Minimum Wage Policy

Policymakers Declared Victory

Colorado’s recent minimum wage increases were promoted as a moral and economic success - an overdue correction for workers struggling to keep pace with rising living costs. For those at the very bottom of the wage scale, that assessment is largely fair. The problem is not that minimum wage workers benefited. The problem is that policymakers treated that benefit as the end of the analysis, rather than the beginning.

In doing so, they failed to acknowledge the measurable harm imposed on workers earning just above the minimum wage, particularly those in the $18 to $22 per hour range. These workers did not simply miss out on gains. Their wages were functionally devalued by policy choices that raised the floor into the middle of the labor market without preserving the wage structure above it.

This outcome was neither accidental nor unforeseeable. It was the predictable result of incomplete policymaking.

The Wage Increases You Approved - and the Context You Ignored

Between 2021 and 2025, Colorado’s statewide minimum wage increased from $12.32 to $14.81 per hour, representing more than a 20 percent rise in four years. Viewed individually, each annual increase appeared modest and defensible. Framed cumulatively, however, the effect on workers earning above minimum wage becomes clear.

Most employees in the $18 to $22 per hour range did not receive comparable adjustments during this period. Annual increases, where they existed at all, typically fell between zero and three percent - often below inflation. Housing, food, energy, insurance, and transportation costs rose regardless. While minimum wage earners saw their pay recalibrated to reflect economic reality, those just above them absorbed the same inflation without commensurate relief.

The result was not wage stability, but erosion.

Local Minimum Wages Pushed the Floor Into the Middle

The statewide figures alone understate the impact. Local minimum wage ordinances accelerated the compression in ways policymakers failed to fully account for.

By 2025, the minimum wage reached $18.81 per hour in Denver, exceeded $16.50 in Edgewater and unincorporated Boulder County, and surpassed $15.50 in Boulder. These are not edge cases. They represent major employment centers and public-sector hubs.

In these jurisdictions, wages that once reflected experience, tenure, and responsibility now overlap with - or fall below - entry-level pay. A worker earning $18 per hour may technically remain above the statewide minimum, yet be underpaid or functionally entry-level in their local labor market.

This is not a symbolic shift. It is a structural one.

What $18 to $22 an Hour Used to Mean - and What It Means Now

Historically, wages in the high teens and low twenties signaled advancement. They reflected accumulated knowledge, reliability, specialized skills, or supervisory responsibility. They represented movement up a ladder.

That ladder has been flattened.

Today, an $18 per hour wage sits only marginally above the statewide minimum and below the legal minimum in some cities. The worker’s job has not changed. Their responsibilities have not diminished. Yet the economic meaning of their wage has been fundamentally altered.

No pay cut occurred on paper. But in practical terms, these workers experienced a loss of relative value, purchasing power, and professional distinction.

Why This Increase Was Different From Those That Came Before

Policymakers frequently justify the current outcome by citing precedent: minimum wages have risen before, and the labor market absorbed those increases without widespread harm. That comparison is misleading.

Earlier increases adjusted the floor while maintaining clear separation between entry-level and experienced roles. Wage ladders bent, but they did not collapse. The recent increases crossed a threshold those earlier policies never approached. By lifting the minimum wage into the high teens without proportional adjustments above it, policymakers introduced compression into the middle of the wage structure for the first time.

This was not simply a larger increase. It was a qualitatively different one.

The Analytical Gaps That Made the Outcome Inevitable

The failure here was not one of intent, but of scope. Policymakers evaluated legal compliance and celebrated the optics of raising the floor, yet neglected to seriously model internal equity, compression thresholds, retention risks, and geographic spillover effects.

They assumed the middle of the wage distribution would absorb the shock. Instead, it buckled.

This oversight is especially striking given that the affected workers are often those who train new hires, stabilize operations, and serve as the backbone of public services, healthcare systems, and educational institutions.

The Consequences Now Playing Out Across Workplaces

The effects of this compression are no longer abstract. Workers earning $18 to $22 per hour lost purchasing power even as expectations increased. Many were asked to train employees earning nearly the same wage, absorb additional responsibility, and accept promotions that offered minimal financial incentive relative to the stress and liability involved.

Advancement increasingly ceased to make economic sense. Predictably, capable workers declined promotions, disengaged, or left altogether. Organizations now face weakened leadership pipelines, higher turnover, and the loss of institutional knowledge - costs that far exceed the expense of maintaining proportional wage differentials.

These outcomes are not market corrections. They are the delayed consequences of structural neglect.

Budget Constraints Do Not Eliminate Responsibility

Policymakers often respond by citing limited budgets or asserting that market forces will resolve the imbalance. In practice, the market responded by flattening pay scales, freezing wages above minimum, cutting benefits, and increasing turnover. The costs did not vanish; they were displaced.

Claiming fiscal restraint does not absolve decision-makers of responsibility for foreseeable outcomes. It merely explains why those outcomes were allowed to occur.

This Was Never Worker vs. Worker

Raising the minimum wage and protecting experienced workers are not competing goals. Treating them as such reflects a misunderstanding of how wage systems function.

Compensation structures are interconnected. Raising the floor without reinforcing the middle does not strengthen equity; it undermines it. A system that fails to reward progression discourages skill development, retention, and long-term commitment.

The Question That Still Demands an Answer

If workers earning $18 to $22 per hour are essential enough to keep services running, why were they excluded from the compensation analysis that accompanied these wage increases?

Ignoring that question does not neutralize it. It confirms the oversight.

Raising the Floor Was Not the Mistake - Stopping There, Was

Raising Colorado’s minimum wage was not wrong. Treating it as a complete solution was.

Without deliberate protections for wage progression and proportional adjustment, the policy did more than lift the lowest earners. It quietly eroded the value of experience and advancement across the workforce. That outcome was foreseeable, preventable, and the responsibility of those who chose not to see the full picture.