"Colorado is one of 10 states where the minimum wage is tied to inflation."

Inflation is down because fuel prices dropped.

However, all the product prices that went up because of fuels prices have not dropped.

In other words, this sucks.

In my opinion, if you receive income that is adjusted for the cost of living, then it's only fair that you adjust down as well as up.

I don't receive a COLA. If inflation is raging and my company doesn't make a profit, I don't get a raise. Conversely, if the cost of living is falling and my company makes a huge profit, I get a nice raise.

Quid pro quo if you receive a raise based on cost of living, and that cost goes down, then in all fairness your income should also decrease.

Laura, they can't lower the minimum wage lower than the federal standard of $7.25. It's not written very clearly from the article, so have a reread:

"The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That's lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour." So from $7.28 minus .03 is $7.25.

It's interesting to note that the states that tie the minimum wage to inflation have not raised it to around $15 an hour because, that's what minimum wage should be today, adjusted for inflation from 1967 - the last time the minimum wage was a a true minimum wage one could live on.

Even more interesting, today the average hourly wage today is around $15 an hour. And falling.

Forty years into the war on the middle class and we are seriously getting our asses kicked.

my cost of living? up. been going up as the kids get older, my wages get weaker & prices stronger.

If your company has a bad year or there is deflation you don't get a raise, but there is a good chance you do if they have a good year. I get a COLA, and I have no problem not getting adjusted up when the there isn't inflation, but I have fixed expenses that aren't going down. That's the equivalent of you getting a pay cut, which, even with deflation, you might get upset with, especially since there are all sorts of games that get played with reporting the inflation rate and in turn affecting adjustments.

@twophrasebark: That's because the price is more a derivative of competition than costs. Of course a raise in cost is going to raise the price of all products but the reverse does not hold true to lower those prices competition needs to lower them.

@twophrasebark: I wonder if there's a price-fixing case in there somewhere?

Look at a dollar bill. That's where the $13 billion will come from.

@humphrmi: If your company has a loss by the end of a year, does your salary go down?

Mine is higher, because of the spawn, but the costs for the two pre-existing members of my family seem to be lower than they were. Some of this I think is slightly lower prices, some of it is frugality, and some of it is that we don't GO anywhere anymore, between recession-hit friends and a baby that makes us stay home.

All our summer outings were to potluck barbeques and nature hikes and stuff like that.

The cost of living calculation is based on a defined basket of goods and services, among which is fuel. Not getting a COLA increase is no problem if the items in the basket that you actually use are either price-steady or declining. It's not quite so easy if the items you use are those that are undergoing price increases. The people who are on fixed incomes don't get a bonus and it can be really tough to make it economically when the COLA increase doesn't show up. For example, utility costs and real estate taxes are increasing exponentially. State and local governments don't want to limit access to the trough so they are increasing tax rates or assessed values to keep their take where it was when times were good. We've been encouraging all home owners to challenge assessments on the grounds that property values have declined. If they wind up with thousands of challenges, maybe they'll re-think the process.

@Difdi: There is collusion kick backs and price fixing in all levels of business. From a retail manager who takes money to reface his shelves in a way that puts a product at eye level and at the impulse counter to a chef who takes money to order exclusively from one supplier at full price without too much fuss over quality. To two suppliers rigging a bid so that they alternate who gets the lower bid but the price stays 30-40 cents above where it would have been. To high level corporate shenanigans with all the airlines or record companies, movie producers, credit card companies moving in unison.

In Wisconsin the Energy company wants to raise rates and food is increasing in price. So how is the cost of living lower?

@nygenxer: Repeal of the minimum wage would be a *gift* to the middle class.

Artificial wage controls-- like price controls-- accomplish only one thing: rationing, in this case, labor. Poor people are less likely to get jobs, and teenagers continue to suffer as well.

I'm probably gonna get roasted over this, but I'm glad there's no COLA for Social Security this year. I gross just under $1050 a pay period (two weeks) in income, and it kicks me in the neck every paycheck to see about $300 disappear into the ether in the form of taxes and OASDI (the last being about $100/pay period.) Am I, a 27 year old, trying to raise a family, ever gonna see a dime of the Social Security that I pay in? Of course not.

Knowing this, I shuck in $40 out of my (fairly) meager earnings every payday into a 401K in the hopes of someday retiring. I would much prefer to shuck in that $100 in OASDI and keep the $40 for gas money, but lord knows I can't do that, because the baby-boom crowd and their AARP buddies would crap their pants.

Everybody is having to tighten their belts. Just because you're old, doesn't make you exempt!

@H3ion: Please don't take this as a personal insult, but the "fixed income" argument and everyone who takes up its cry is a load of crap. Yes, you get the same amount every month from the Social Security Administration. That is indeed a "fixed income." So is a salary where you make the same rate whether you work one hour or sixty a week. So is an hourly wage where your boss is screaming "no overtime!"

How many people for the last few years have had to content themselves with 3% raises (if the got that much) because of the declining economy? How many people, of those who actually get bonuses, had those bonuses equal any sort of significant percentage increase in their annual income? I don't know about you, but most us goons at the low end of the middle-class range are hourly wage slaves and aren't lucky to get large bonuses.

@ivanthemute: I don't take it personally because I'm still working and have the ability, if profits are good, to receive extra income. But I know a lot of elderly people who don't share that fortune and, unlike people in their 20's, 30's and 40's who can change jobs when the economy improves and increase their income, or who can advance and receive promotions and increase their income, these elderly people are rather stuck. If they were able to amass a pension or a retirement nest egg, they're probably not in that bad shape notwithstanding no COLA increase, but if they depend on Social Security, they're going to be hurt.

You're not wrong if you're looking at the last few years as a snapshot, but if you're looking over the course of your working years, most people (well, I probably shouldn't say "most" because people in unskilled jobs will not have the opportunity) will have adequate opportunity to advance and increase their income as they advance. I'm making an assumption, which I think is warranted, that most people posting here on Consumerist either have already completed an advanced education (college or more) or are in the process of doing so.

@TCama: Yes.

@Daveinva:

$7.25 an hour is not keeping anyone from getting a job.

Your theory might hold water if we actually set a minimum wage people can survive on. But we don't.

@sonneillon:

Capitalism would work so much better if everyone knew what everyone paid for everything.

@humphrmi: Minimum wage is not automatically adjusted for the cost of living, so not seeing your point here.

@nacoran: +1. I've never had rent go down because, all of a sudden, the proprty management company has fewer expenses. Same with utilities. If EVERYTHING went down across the board and EVERYONE complied with the deflation aspect, then I wouldn't have a problem with a COLA decrease. But that just isn't the case. The solution, to me, is deflation = COLA remains the same; inflation = COLA increase.

@ivanthemute: I agree with you, as a 28-year-old in a similar-but-not-the-same position (military has slightly different pay schemes). But, I figure that when WE'RE old, the younguns will have to pay for us with some new form of Social Security that someone from OUR generation will dream up. Is it a vicious cycle? Hell yes. Will we all benefit in some way, shape, or form? Pretty much. Do I worry about it? Nope, because the world will end in 2012.

@humphrmi: Wages do not adjust for cost of living, unless they want to decrease it. Neither I nor my husband have received a cost of living increase in 5 years. Our bills have steadily been going up in the last year, especially groceries. I really don't see how "cost of living" could be considered to decrease. I really don't see how they can justify a decrease when they refuse to give an increase in the opposite case.

I've been advocating for years that one way to keep Social Security solvent is Diet COLA: inflation -.25% to start. There was no COLA in the enabling legislation -- and while it's a noble thing to do, it's far nobler to keep the fund intact longer for the greater good.

I agree that Colorado's method for determining cost of living is flawed. In much of Colorado, the cost of living is so high (no pun intended) that the hired help cannot afford to live in the same town where they work.

@twophrasebark: Prices did not go back down and many have continued to quietly go up. Almost everything I buy at the grocery store has gone up a dime or so in the last three months. This is on top of the big jump everything took last year. The price of non food things has not gone back down either.

I am so frustrated with the state of everything. It seems like we all over pay and the only ones benefiting are Wall Street bankers and big company CEOs. I have been trying to change my spending towards smaller businesses as much as possible. In the hopes that more of that money reaches the hands of people who actually need it.

@Eyebrows McGee (now with more baby!): I can't remember the last time we went out for a night to a show, bar, restaurant. The cost of everything is up, the eldest one is still home and without a job and none of our friends have any money to go out.

@ivanthemute: Yeah, Social Security is in a downward spiral and somebody is going to end up getting hurt. Unfortunately, I think it's going to be our generation.

@PunditGuy: By doing that, over the long run you basically eliminate Social Security as inflation outpases the increases. (Getting $1000 a month becomes insignificant 400 years from now when an apple costs $1000)

@nygenxer: Though to be fair, the price of products in some cases has not truly kept with inflation since 1967. Newspapers are a good example off the top of my head.

However, I agree. Aside from teenagers, who are household dependents, the current minimum wage is not enough for an independent person to live on. In that sense, it doesn't really do anything, it's just something pointless that makes everyone feel better. Whether it goes up or down by 3 cents doesn't matter because anybody making 7.25 or 7.28 an hour is regardless going to struggle with the normal necessities of life, let alone raising a family.
The biggest problem here is that when these adults struggle because they can't afford to eat or rent on minimum wage, they turn to social services and society picks up the slack. In reality, you've got a point, Mickey D's or whoever employs them should be required to provided independent adults with a liveable wage and benefits so that they don't need to turn to social services, but that would cut into their profit margin, so the general community takes the heat.

@lmarconi: It's okay, the death panels will fix everything.

@ivanthemute: The average social security recipient who is retired is bringing in less than half what you make per month, arguably without the ability to work more hours or get a second job or exercise the benefits of being 27. They already spent 30 or so years contributing to the system, and have done their time. Hopefully, most of them have additional retirement to supplement their benefit, but for many, that check is it and the cost of living is not going down everywhere.

I understand not giving a COLA this year due to the economy, but I don't regret paying into the system that helps provide for my grandparents and other good folks who have already done their share.

@ivanthemute: Im with you.

@twophrasebark: Not all prices rose. Yes, the core CPI (which excludes food and energy) has risen slightly (1.5% unadj.), but food prices have come down along with energy (-0.2%, or -2.5% for food at home).

As a person on Social Security Disability, I wish that the COLA was based on real world costs. I have a basic budget which really is all essential stuff (no trips, r adult toys). I started to jot down increases for each catagory as they occur a few months back (obviously some things such as food are harder to pinpoint). My electric rate increased 12.2% 9/09, my auto insurance is increasing 10% 11/09 (I am one of those getting screwed with an increase due to a drop in my credit rating, thanks largely to my bank closing access to my HELOC), my water went up this summer @10% (it was just prior to me tracking this stuff exactly on my monthly budget), my natural gas supplier has a rate increase pending. I took advantage of lower interest rates and moved around money borrowed on my HELOC this summer to reduce the interest rate with a fixed 10 year term, so that has saved me about $60.00 per month on interest. I believe that my real world basic budget costs have increased 2-4% over the past year when everything is taken into account. To be honest, I think last year's huge increase overstated real inflation a bit, so perhaps it's a wash?

Actually a little less. I like the empowerment of controlling my expenses so that they don't control me.In that vein , here are 5 things that I have done to make sure that the inflation that the government says doesn't exist doesn't ruin me.

1) Scooter...Scooter...Scooter. I ride everywhere I can on my scooter. Blended MPG (with my Toyota T-100 )about 43 MPG. Fuck you , ayatollah and the camel you rode in on.

2) I check my balance every single day online at my cut throat , asshole bank (Regions). I haven't paid a penny in fees by the simple expedient of not bouncing any payments or spending money that I don't have. I do have a credit union account also ,but since I travel a lot ,I can't use their ATM's too far away. I haven't paid a penny in aTM fees either because I use their ATM locater before I take off. I print out all the bank ATM's that I might need. I also buy groceries and get cash back when needed instead of a trip to an ATM.

3) I shop even more carefully at Aldi , Banana Box salvage grocery stores (look them up) and clearance sales at local supers. I have tracked it - I am spending about 30 bucks a month less this year.I buy the marked down steaks and chopped sirloin and have had some bodacious barbecues this summer - at about 40% off.

4) Lots of new furniture coming into the U.S. is just chinese sawdust crap anyway ,so I have been scouring Craigslist and thrift stores for real oak furniture that can be refinished and made to look new.Gotta be careful ,though. The chinese (and their retailers in the U.S.) have gotten better and gone to great lengths to disguise inferior pressed board as real wood.

5)A tune up on a modern car is a set of spark plugs. Period. ( Most cars- if you have an exotic ,you are probably not reading this) I change my own and save a trip to the dealer and a $100 + bill. Most oil change places are ripoffs. You can do your own for about $15
Many auto parts retailers will take back your used oil so you don't have to worry with it.

There- Nothing to this "beating inflation thing"

@Snarkysnake: There's a point at which frugality hits diminishing returns, though. Take the oil change thing: I know of a great local mechanic (not a chain) that will change my oil for about $25 including supplies, labor, and disposal. I could change my own oil, but I'm more than willing to pay $10 more for someone to do it for me and save me the trouble, time, and getting all greasy. If we were talking $100, you might have a point there.

So - I'm willing to go somewhere that will give me a better deal, within reason. I'm not necessarily willing to do things that I find annoying over saving $10.

@MooseOfReason:

Would this be a National Treasure reference?

@Daveinva: I disagree with you, as do most economists.

I think if you take a quick look at countries without minimum wage versus those that do, you'll want to live in those that do. Furthermore, you'll especially want to live in those that have a progressive, livable minimum wage.

As for the suffering of unemployed teenagers, we should be more concerned with the unemployment of the PARENTS of those teenagers, should we not?

@lmarconi: It's interesting you mention Mickey D's. Did you know that for each minimum wage worker, they get a tax break worth double the wages earned by that minimum wage worker?

That's right: your tax dollars provide six months of free minimum wage labor to McDonald's for each new hire. So if the government is providing six months worth of wages, is there any way to exploit the system further, you ask? Why yes there is.

Ever wondered why the turnover rate is so high? It's because those tax breaks run out after three months. If the average turnover rate is three months (and it is), if you make 'em quit and hire another worker you get ANOTHER six months of free labor - or three months of free labor plus extra money. And yet they still charge workers for uniforms...

Ah, take the red pill my friend, and see how far down the hole goes.

@psm321: I suspect that's the idea. Social Security was and is a horrible idea. But you can't simply cancel it, because people are currently counting on it.

By decreasing payouts more slowly than inflation, you allow this who currently depend on it to continue to receive it. Everyone else will have time to plan for their decreased payouts.

It's a great idea.

@razremytuxbuddy: That's true in many places in the US. Why is that a problem? If the 'hired help' choose not to commute, then the people hiring them will either do without, or increase their pay.

@srh: I guess I was complaining about the fact that PunditGuy was either unaware of this implication (and thus I wanted to point it out), or was trying to hide it (also a good reason to point it out). There was no hint in his post that he thought it was a good way to slowly eliminate Social Security without hurting people counting on it.

Of course, I happen to be a tax-and-spend liberal and think that Social Security is a great thing and the proper fix is to remove the stupid cap, but the point of my post was to make sure it was clear that PunditGuy's idea would basically eliminate Social Security in the long run, not save it as he seemed to be saying. (And let's please not turn this into a discussion of the merits... I think we've all heard the arguments on both sides...)

@lmarconi:

not true, while consumers cost haven't gone up much, the cost for advertisers have.

@Nascar24Dude: Hah, no. I'm saying they'll print the $13 billion and lower the value of the dollar.

@Daveinva: By "gift" you mean that the solidly middle class would see the gap between them and the working poor turn into a chasm, so we could all afford to hire servants?

@Eyebrows McGee (now with more baby!): Quid pro quo. They get the increase they want, we get the death panels.

@Snarkysnake: I recently refurnished my house (after the end of a 12-year relationship) at Ikea, Wal-Mart, and the local Catholic charity thrift store. Iron (OK, steel finished to look like iron) beds. Iron, slate, and solid oak tables. Metal and glass computer desk. Solid cherry dressers. Solid wood (not sure what kind) bookcases.

But good luck getting any of that home on a scooter, heh.