Fort Collins won't raise minimum wage after City Council kills ordinance on split vote
Fort Collins won't see an increase in the local minimum wage after City Council voted down any proposed increases in a split 4-3 vote Tuesday.
Council members Kelly Ohlson, Julie Pignataro and Mayor Pro Tem Emily Francis voted in favor of a local minimum wage ordinance, and council members Shirley Peel, Susan Gutowsky, Tricia Canonico and Mayor Jeni Arndt voted against it.
Raising the minimum wage was identified as one of council's 31 priorities to accomplish by the upcoming November election.
With the local ordinance voted down, the city will continue to follow the state’s minimum wage, which is $13.65 per hour and $10.63 per hour for tipped workers.
In Fort Collins, a living wage for a single adult working full-time is $18.92 per hour, and a living wage for a full-time, dual-income family with a child is $21.85 per adult, according to Massachusetts Institute of Technology.
Colorado law passed in 2016 set a statewide minimum wage, including scheduled increases, and allowed municipalities to approve their own local minimum wage ordinances, acknowledging that different areas of the state have different costs of living. The county and city of Denver are the only places that have set a higher minimum wage, passed in 2019.
Denver's cost of living is 8.7% higher than Fort Collins, and its current minimum wage is $17.29 and $14.27 for tipped workers, according to Colorado State University postdoctoral researcher Emily Gallichotte.
What would the minimum wage have been if council had passed it?
Council was presented with two options for a local minimum wage Tuesday:
Option 1 would have increased the minimum wage to $16.65 by 2026.
Option 2 would have increased the minimum wage to $17.29 by 2026.
Starting in 2027, the Fort Collins minimum wage would have increased at a rate of no less than 2% and no higher than 5% per year, in accordance with the consumer price index. The minimum wage for tipped workers would have also increased along the same schedule, but $3.02 lower than nontipped workers, per state law. This wage would have applied to all work done in city limits, even if a business was not headquartered in Fort Collins.
A third option, not up for a vote Tuesday, was the highest amount, presented to council during a November work session. It would have increased minimum wage to $18.50 by 2026.
Option 2 presented Tuesday was proposed by Gallichotte and was considered by many on council as a reasonable middle ground during the April work session. Despite many indicating support for that option last month, most council members' concerns for how this could impact small businesses outweighed the potential benefits in their decision Tuesday.
What supporters of a minimum wage increase said
People who spoke in favor of raising the local minimum wage Tuesday cited personal stories and published studies supporting the ordinance.
Increased wages do not negatively impact employment but make it easier for businesses to recruit and retain employees, said Sophie Mariam, labor policy analyst at the Colorado Fiscal Institute.
Increasing wages for the lowest earners leads to more spending at local restaurants and shops, stimulating the local community, said Erik Cornell, representing the United Food and Commercial Workers union chapter in Northern Colorado.
"It might seem like too much to some of you, but the increase will help working families tremendously in ways only hourly wage workers will understand," Cornell said, encouraging the council "not to see this as a handout, but as a way to reinvest in your community."
Other speakers said wage stagnation is making Fort Collins unaffordable, noting that the cost of rent, groceries and other necessities continues to rise citywide. Increasing the minimum wage is about the "wellbeing of the community," Alvaro Acevedo said through a translator, adding that many people are working multiple jobs just to pay basic expenses.
"The work that we provide will always be more than what we receive in payment," Acevedo said. He presented a letter with about 70 signatures supporting a local minimum wage increase.
Francis said the city needs to look at everything that impacts affordability and do what it can to make Fort Collins a more affordable and livable place, and that includes raising the minimum wage. If the city is serious about increasing diversity and equity, then increasing the minimum wage is essential, she said, saying the majority of people working at the minimum wage are women of color.
"I think that we owe it to the people of Fort Collins," Francis said.
Pignataro said the state gave cities the power to implement their own minimum wage acknowledging that the cost of living varies across the state. The cost of living in Fort Collins is clearly higher than places like Walden, "and yet we're all stuck at the same minimum wage," she said.
Pignataro said the tipping system is broken, but just because they aren't allowed to exempt tipped employees from local minimum wage ordinances doesn't mean "everyone else should suffer."
While business owners and workers all suffered from the effects of COVID-19, much of the economic recovery funds went directly to businesses, leaving low-wage workers at more of an economic disadvantage, Gallichotte said in her letter to council.
Gallichotte's research also disputed a claim from many business owners that wages are the majority of their expenses. Gallichotte said wages typically make up about 22% of a business's total receipts.
Ohlson called the ordinance's failure "another in a long list of policy disappointments over the last two years" from the council.
Ohlson said the claims about businesses leaving town or having to close because of the increased cost of wages is "fearmongering" that always surrounds discussions about raising wages, and almost all of the time, "the worst just doesn't happen. That's not what actually happens."
People who earn more money spend more, supporting the local economy, Ohlson said.
"The cute little stories are nice, but it's not what actually happens in the real world," Ohlson said.
But not all businesses were opposed to the ordinance, Francis said. She spoke with a business owner who was overall supportive of the increase and said they could make it work.
"I firmly believe the most powerful thing we can do is give people the power and autonomy over their spending power," Francis said.
What detractors of a minimum wage increase said
Business owners told council this is not the right time to raise the minimum wage, and most council members agreed.
Lauren Storeby, who owns Snack Attack Specialty Sandwiches and Brews near the Prospect Road and College Avenue intersection, said they "are paying our employees more than what we're paying ourselves" and a minimum wage increase would lead to price increases for consumers, which have already increased by 30% since last year.
Adam Vander Sande, who operates five local restaurants including Austin's American Grill, said he "believes the proposal is coming from a place of good, but it's the wrong moment in time and I believe it will do more harm than good."
Cost of living "is at an all-time high," Vander Sande said, and business owners are feeling that, too, from the grocery store and the gas pump to paying for child care. Businesses are also facing new mandated expenses, including sick pay, family leave, debt from the pandemic and market-driven increases in costs of goods and labor, Vander Sande said.
Many business owners who addressed council said they are already paying nontipped workers, like line cooks and cleaning staff, above the minimum wage, but being forced to pay tipped workers even more would be a huge financial burden for them. Business owners — Storeby and Vander Sande included — said these increased costs would force them to raise their prices, driving customers to other nearby towns where prices are lower.
Gutowsky said she was pleased to hear many business owners are already paying above the minimum wage and that the market is driving wages up. She said her worry is that putting this increased cost on businesses would mean some business owners wouldn't be taking home a paycheck to pay their bills.
"I'd like us to look at a small business as an employer's way to make a living," Gutowsky said, adding later that she's struggling with figuring out "how much is enough for the worker and how much is too much for the business."
Arndt said a minimum wage increase wouldn't hurt the large corporations like Starbucks or McDonald's, but the small businesses that "make Fort Collins special." She said she spoke with small business owners who said a minimum wage increase would hurt their businesses, and that made her concerned about small businesses in Fort Collins moving to one of the many nearby towns where they can pay lower wages.
"I think this would lead to the corporatization of Fort Collins," Arndt said. "... I don't think that's the Fort Collins we want to live in."
Canonico said she sympathizes with business owners and minimum wage earners — experiencing both realities herself at some point in her life — and while she said she "would love to support the highest proposal here," she sympathizes with business owners who are facing additional and growing costs.
"Fort Collins is not affordable, but in many ways we're doing pretty well," Canonico said. "We're doing better than most areas of the country, not that we don't have more work to do."
Peel said more regulation won't help costs but actually drive them up, citing a business owner she spoke with who told her a minimum wage increase would drive up their costs drastically, "and that's what's concerning to me."
Peel said research and data can be cited from many sources, but they also need to consider the variables in the local community.
A regional approach?
Arndt suggested that, if the root problem really is affordability and giving individuals more purchasing power, the city could consider some type of limited supplemental income options, similar to a program in Denver, so the government is paying people more instead of telling small business owners to spend more out of their own pockets. Canonico also informally proposed multiple alternative ideas for council to consider moving forward on minimum wage:
A slower wage increase, like a 2.5% increase every year instead of $1 annually, to lessen the impact on businesses
Working with the legislature and local state representatives to amend the state law to allow for exemptions for tipped employees or businesses with fewer than 20 employees
Continuing to engage with the Boulder Consortium of Cities on a more regional approach to minimum wage and to engage with Fort Collins' neighbors in minimum wage conversations.
"I believe this is a regional conversation, and we should continue to reach out to regional our regional partners to move ahead," Canonico said.
This article originally appeared on Fort Collins Coloradoan: Fort Collins minimum wage: City Council kills proposal to raise it
