Update:The Denver City Council passed the new minimum wage March 4.
Employees of the City and County of Denver and many of its contractors will earn at least $15 an hour starting in 2021, assuming city council members pass an ordinance in March that raises the bar.
Mayor Michael Hancock’s administration, City Councilwoman Robin Kniech and labor union organizers have been hammering out a deal for the past several months. Hancock announced the new base wage Thursday.
The mayor name-dropped Vice President Joe Biden, who he said pushed him to take action four years ago while visiting Denver.
“He shared with me one-on-one that he felt the greatest threat to our sovereign nation was four decades of wage stagnation,” Hancock said. “He felt that we as a city — governors and mayors — need to work hard to address that issue.”
A union-led push to put a $15 minimum wage for airport workers on the ballot also precipitated the ordinance, according to Brendan Hanlon, the city’s chief financial officer.
Denver’s minimum wage, set by the state, is $11.10. The ordinance would ease in raises over three years, starting in July, when city hires will start earning at least $13 an hour. They’ll earn $14 in 2020 and $15 the year after. Starting in 2022, the wage will be at least $15 but will adjust based on the regional cost of living.
Unite Here Local 23 and SEIU Local 105, the two unions who negotiated the deal, condone the staggered raises.
The pay increase will affect more than 1,800 city employees, or a little under 14 percent of the workforce. Companies hired to provide service to the city or on city property will have to abide by the pay increase, too. So will their subcontractors.
About 6,300 airport workers will be covered. Labor organizers said they would pull the airport wage measure from May’s ballot if the bill passes.
The cost to taxpayers will be nearly $6 million over three years, officials estimate.
Amelton “Archie” Archelus, a United Airlines warehouse worker, said the new wage will change his life because he won’t have to choose between buying groceries and paying rent.
“After 19 years working for the airlines, neither I nor my wife have ever made $15 an hour,” Archelus said. “After 19 years, I am still struggling to pay my bills and pay my rent on time. I have to tell my kids they can’t go to the movies so that I can afford to buy groceries.”
Mengistu Sewore is in a similar boat, which he says will rise after the new wage begins. He’s a passenger service agent at Denver International Airport.
“We work very hard to provide the best possible service to passengers and take pride in our work because we know how it’s important,” Sewore said. “We are always focused on customer service. Sadly, we are only paid minimum wage. The current minimum wage makes it impossible to afford the high rent in Denver.
“This kind of situation is not my American dream.”
There are some catches.
Any new contract will have to pay the new wage. But Denver can’t force the $15 wage into existing contracts. Those companies don’t have to abide by the new wages, though the city council will ask companies to do so and amend agreements if businesses wants to play nice.
If not, the city has leverage, Kniech said. The council approves all contracts over $500,000, so it’s in the best interest of companies to follow the new standard if they want to continue working with the government.
Higher wages can also curb turnover and improve production, she said.
“To the airlines, to the concessionaires, to the janitorial service providers, to those who help make our city run — you too are part of the success of the airport,” Kniech said. “We recognize that this bill might be a stretch and a transition for you, and I call upon you today to rise to the occasion. We firmly believe that you will see less turnover, you will see higher production, you will see workers more attached to your business and engaged with you. And in the long-run, we want to uplift your businesses along with your workers and along with our city.”
About 300 current contractors — 10 percent of all city partners — pay wages as low as $11.10, according to the city’s finance office. Hanlon, the CFO, estimates companies will pay an extra $7 million over three years to get up to code.
Another wrinkle: Some companies are exempt: The ordinance won’t affect the following: businesses with contracts under $50,000, businesses of 25 or fewer employees holding contracts under $500,000, suppliers and goods providers, state and federally mandated programs, intergovernmental agreements, and other more obscure arrangements.
Denver can’t mess with federal or state employees’ pay, either.
Why doesn’t Denver raise the minimum wage for the entire city?
It can’t. Under state law, Colorado cities and towns aren’t allowed to set their own minimum wage.
This article was corrected. The author originally reported that contractors in the construction, transportation, solar energy and agricultural industries would be exempt from the wage. That element was true of the ballot measure, but not of the ordinance.