A sign at a Papa John’s in 2021 advertises wages for new hires. (BusinessDen file)
Denverites will ring in the new year with a new minimum wage.
Starting Jan. 1, Denver’s minimum wage will increase by $1, from $17.29 to $18.29 per hour. For tipped employees, such as waitresses and bartenders, the same $1 raise will lift wages from $14.27 to $15.27 as long as they make at least $3.02 in tips.
That’s a big jump — 65% — from five years ago. The city’s minimum wage was $11.10 in 2019.
Behind the numbers is a formula. In 2019, the City Council passed a measure increasing the minimum wage to $15.87 by 2022 in a series of yearly “catch up” phases.
Starting in 2023, the annual increase is now tied to the cost of living. This is measured through the well-known consumer price index, CPI — but with a twist.
Usually, the index measures a “basket of goods” commonly purchased by consumers, such as gas and clothes. The change in the prices of the goods over time is averaged across the items in the basket to represent inflation.
But Denver’s methodology is a little different. The city uses a variant of the CPI, called the CPI-W, that is specific to those earning an hourly wage or working in clerical occupations.
The difference between the two is in the people they use to measure inflation. The traditional CPI covers about 93% of the population, per the Bureau of Labor Statistics. Denver’s metric covers 29 percent, a much smaller but more precise measurement.
To calculate the change in the minimum wage, the first six months of the year’s CPI is compared to the same period in the previous year. The minimum wage is then increased by the same percentage.
Inflation (measured by CPI-W) increased by 5.8% when comparing the first half of 2023 to 2022. Since 5.8% of the current $17.29 is $1, the wage increases by that rate; the same process is done for tipped workers.
A sign at a Papa John’s in 2021 advertises wages for new hires. (BusinessDen file)
Denverites will ring in the new year with a new minimum wage.
Starting Jan. 1, Denver’s minimum wage will increase by $1, from $17.29 to $18.29 per hour. For tipped employees, such as waitresses and bartenders, the same $1 raise will lift wages from $14.27 to $15.27 as long as they make at least $3.02 in tips.
That’s a big jump — 65% — from five years ago. The city’s minimum wage was $11.10 in 2019.
Behind the numbers is a formula. In 2019, the City Council passed a measure increasing the minimum wage to $15.87 by 2022 in a series of yearly “catch up” phases.
Starting in 2023, the annual increase is now tied to the cost of living. This is measured through the well-known consumer price index, CPI — but with a twist.
Usually, the index measures a “basket of goods” commonly purchased by consumers, such as gas and clothes. The change in the prices of the goods over time is averaged across the items in the basket to represent inflation.
But Denver’s methodology is a little different. The city uses a variant of the CPI, called the CPI-W, that is specific to those earning an hourly wage or working in clerical occupations.
The difference between the two is in the people they use to measure inflation. The traditional CPI covers about 93% of the population, per the Bureau of Labor Statistics. Denver’s metric covers 29 percent, a much smaller but more precise measurement.
To calculate the change in the minimum wage, the first six months of the year’s CPI is compared to the same period in the previous year. The minimum wage is then increased by the same percentage.
Inflation (measured by CPI-W) increased by 5.8% when comparing the first half of 2023 to 2022. Since 5.8% of the current $17.29 is $1, the wage increases by that rate; the same process is done for tipped workers.
