County kicks off local minimum wage workgroup meetings
FRISCO — Summit County kicked off a series of workgroup meetings on Thursday to discuss the possibility of a local minimum wage. The workgroup process was initiated following the withdrawal by county commissioners of an advisory question on this year’s ballot, which would have asked voters if they approve of a local minimum wage that would rise to $15 an hour by 2023.
The meeting was presided over by county manager Scott Vargo and regional business services coordinator Mark Hoblitzell from the state’s Department of Labor and Employment. The kickoff meeting served as a primer on the local minimum wage law and data regarding the county’s workforce to set a foundation for further, more nuanced and informed discussion.
“We are trying to reach a consensus on the issue, so please try to keep an open mind,” Vargo said in opening the meeting. “We’re not necessarily going to come up with a solution with this process, but we are trying to listen to what folks are saying.”
In attendance at the morning workgroup were mainly business owners and representatives from major employers in the county, including Summit School District, Vail Resorts, Copper Mountain and Breckenridge Grand Vacations. Aside from the school district, no employer operating with a unionized workforce, union representatives, nor workers making the current minimum wage were present at the morning workgroup, which preceded the evening workgroup at 6 p.m.
Vargo and Hoblitzell revealed some new information from the state, including how any minimum wage increase in the county would only take effect on January 1, 2021, and not next year as had been understood before. The statewide minimum wage, which will increase to $12 an hour on January 1, 2020, will be the minimum wage in Summit County next year.
According to the law, the maximum amount the county could increase the local minimum wage each year is by 15% or $1.75, whichever is greater. Therefore, if the county passes a higher minimum wage, it could only increase to $13.80 by 2021 before eventually reaching whatever amount the county agrees upon, if a local minimum wage is passed.
The law says that any adult or emancipated minor who works four or more hours in a certain geographic jurisdiction would be subject to that jurisdiction’s local minimum wage, if one is passed, regardless of where that worker actually resides.
Vargo also cleared up the “greatest” misconception about the minimum wage law, which is whether the ballot question is necessary to raise the minimum wage. The law actually does not require a poll or vote of the people, and the commissioners could pass it on their own through the county’s standard legislative process.
Vargo said the county will be continuing to research how a higher minimum wage around $15 an hour might affect Summit’s economy, including looking at data from Seattle, which raised its minimum wage to $15 an hour four years ago, which was then the highest in the nation. Vargo also noted that the minimum wage is not meant to be a “self-sufficient” wage, but rather a “wage floor” by which all jobs would calibrate hourly pay.
At the nationwide level, the Congressional Budget Office forecasted that a national minimum wage increase to $15 an hour by 2024, more than doubling the current federal minimum of $7.25, would present a mixed bag in terms of results.
The CBO estimated that a national minimum wage increase would affect 17 million workers, and that 1.3 million people would be lifted out of poverty. That would come with the indirect benefits of more purchasing power for lower income workers, which in turn would boost the consumer economy, as well as more steady retention of employees who don’t have to keep switching jobs to make more money.
A higher local minimum wage would theoretically attract a more robust, skilled workforce from outside the county who would commute to work here.
But the CBO also estimated that 1.3 million jobs would probably be displaced with a wage floor increase. Raising the minimum wage would also disproportionately affect small businesses that have much tighter profit margins than large corporations and franchises. The increased labor costs would also need to be offset with higher prices, staff reductions and service reductions.
Another issue with increasing the minimum wage, Hoblitzell pointed out, is a “benefits cliff” problem where people who rely on assistance programs like SNAP or federal school lunch aid would see those benefits taper off and disappear as their income rises higher than eligibility, even if they still make too little to be self-sufficient.
The main point of consternation at the workgroup continued to be about the unique nature of the restaurant industry in Summit County and how it would be disparately impacted by a $15 minimum wage, even with a tip offset.
Restaurauteur Dick Carlton and others argued that their tipped workers make much more than what is reflected in the state’s wage data, which showed that they are not being paid enough to be self-sufficient. Unreported tips and the front/back of house nature of restaurants were not reflected in the data, they argued.
They also argued that restaurants could see less people willing to work as cooks and managers if servers at the front of the house were making nearly as much as they do now. There is also an issue with attempting to enforce the minimum wage in an industry that was looser when it comes to reporting wages and employment as workers come and go so frequently.
Business owners and representatives also argued nearly across the board that they all paid more than the current minimum wage to keep competitive, making a higher local minimum wage moot while causing damage to the local economy. The ski resorts also pointed “soft benefits” they give to employees, such as housing and ski passes, that can’t be properly accounted for in wage data.
But the biggest elephant in the room affecting self-sufficiency — the cost of housing in Summit County — was once again laid bare as Vargo gave updated numbers as to how the existing Summit County housing stock is currently being used.
Vargo said the county’s housing authority conducted a housing needs assessment in October to study the impact of the county’s newly launched short-term rental permitting process.
Vargo said there had been 3,500 applications for short-term rental permits in unincorporated Summit County so far, with another 1,000 short-term renting without seeking a permit. That’s 4,500 short term rentals in unincorporated Summit, with 3,800 short term rentals in Breckenridge, 1,000 in Frisco and another 100 to 200 in remaining municipality. That comes to about around 10,000 short-term rental properties within Summit County out of the 31,000 housing units available.
A third of all housing units in Summit being short-term rented, while another third of units are second homes that are vacant most of the year and only a third of properties occupied by people who live and work in Summit County full-time. The numbers verified the fact that two-thirds of all houses in Summit County are owned by people who do not actually live and work here, creating one of the most exclusive and expensive rental markets in the state and nation.
The workgroup had broad consensus that the lack of inventory and cost of housing was the most pressing issue regarding self-sufficiency in the county, one that a higher minimum wage of $15 may not be able to overcome or address.
“Summit County is one of the most expensive places to live in the state of Colorado,” Vargo said as he assented to the points being made. “The Board of County Commissioners will be looking at everything — the cost of housing, short-term rentals, healthcare, childcare and mental health — along with wages. We’re looking at all of these things and going through the process, something we owe to the county’s residents. It doesn’t mean we’ll make any actual changes.”
The workgroups will continue meeting into December. Vargo said that, while the meetings following the initial kickoff meeting are meant for those who were invited and selected to be on the formal workgroup, workgroup participants are encouraged to invite employees and clients to attend. The following is the workgroup schedule:
- Meeting 2 will take place on Oct. 9 from 2-4 p.m. at the Fremont and Hoosier rooms in the Summit Community & Senior Center at 83 Nancy’s Place in Frisco.
- Meeting 3 will take place on Oct. 23 from 3-5 p.m. at the Hooser room in the senior center.
- Meetings 4 and 5 will develop a workgroup proposal for the BOCC to act upon.
- Meeting 4 will take place on Nov. 6 from 2-4 p.m. at the Fremont and Loveland rooms in the senior center.
- Meeting 5 will take place on Nov. 20 from 4-6 p.m. at the Fremont and Loveland rooms in the senior center.
- Meeting 6, taking place on Dec. 4 from 4 to 6 p.m. at the Fremont and Loveland rooms, will finalize the workgroup proposal for presentation to the BOCC at its Dec. 10 work session.
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