Fort Collins City Council might consider increasing the city’s minimum wage.

Council is expected to decide in November whether to fund an analysis and engagement process assessing how a higher minimum wage could impact residents and businesses.

Colorado’s current minimum wage is $11.10 an hour ($8.08 for tipped workers). It will increase to $12 an hour ($8.98 for tipped workers) in January 2020. A new state law allows municipalities to set their own minimum wages starting in 2020.

Colorado municipalities will be able to increase the local minimum wage by as much as 15% or $1.75 an hour, whichever is higher, each year. After 10% of municipalities have set their own minimum wages, any municipalities wanting to follow suit will have to wait for approval from the Colorado General Assembly.

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The analysis and engagement process would cost between $85,000 and $110,000 and take at least nine months to finish, economic health director Josh Birks wrote in a memo to council. If council approves the funding, the city would put out a request for proposals and award a consultant a contract to research the local labor market and demographics, survey employers and employees, conduct community focus groups, engage with advisory boards and commissions, and make policy recommendations. The consultant could start that process as soon as January, with a proposal possibly coming to council for review as soon as spring 2020.

The state legislation requires municipalities to confer with local chambers of commerce, small and large businesses, businesses that employ tipped workers, labor unions and community groups before increasing minimum wage. The law allows counties and cities to collaborate on minimum wage policies, so it’s possible Fort Collins could work with Larimer County or nearby communities to adopt a regional minimum wage.

Council member Julie Pignataro got the ball rolling on minimum wage by asking staff to research what a minimum wage assessment would entail.

She said the assessment process should also look at how increasing the minimum wage could affect people receiving government assistance or living in income-restricted housing. Wage increases for those groups can sometimes have a paradoxical impact known as the “cliff effect” when increased income triggers loss of income-based benefits that outweigh the value of the pay bump.

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Pignataro said she’s interested in a possible minimum wage increase because it aligns with some of council’s key priorities: equity, affordable housing, cost of child care, transportation and environment (because lower wages inspire more people to seek cheaper housing outside of Fort Collins and commute here for work).

“I really just want to make sure that everyone who’s working a full-time job 40 hours a week can afford to live,” she said.

Colorado’s minimum wage is significantly higher than the federally required $7.25, but minimum wage still hasn’t kept up with inflation and rising cost-of-living, added council member Ross Cunniff. If the federal minimum wage had kept up with inflation and the growth of economic productivity (how much workers produce per hour) since its 1938 inception, it would be over $20 as of 2019, according to Economic Policy Institute analysis.

People who oppose minimum wage increases argue they increase costs for businesses, which are then passed on to consumers. Minimum wage increases can be especially tricky to maneuver for industries with relatively low profit margins, like the restaurant industry. In some communities, employers have responded to minimum wage increases by cutting employees' hours.

Denver leaders will soon review a wage ordinance that would increase the city's minimum wage to $15.87 by 2021, with annual adjustments in later years based on the Consumer Price Index, Westword reported. Outside of Colorado, several states have or will soon raise their minimum wage to $15, including Connecticut, Maryland, Illinois and New Jersey. Seattle's minimum wage for large employers sits at $16 after a round of annual increases that has produced mixed effects.

Supporters of a minimum wage hike say it would help shrink the widening gap between cost-of-living and median income. In Fort Collins, median rent increased 36% (from $906 to $1,233) between 2007 and 2017, according to Apartment List analysis. Median renter income increased 17.5%, from $32,289 to $37,946, in the same period.

“Affordability isn’t just the cost of housing,” Cunniff said. “Affordability is the cost of housing plus the cost of everything else versus how much people make.”

Jacy Marmaduke covers government accountability for the Coloradoan. Follow her on Twitter @jacymarmaduke. Support stories like this one with a digital subscription to the Coloradoan.