Colorado first state to reduce minimum wage

Denver Colorado will become the first state to reduce its minimum wage because of a falling cost of living, according to a report by the Associated Press.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. Colorado is one of 10 states where the minimum wage is tied to inflation.

Because Colorado's provision allows wage declines, the minimum wage will drop due to a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.

"We can't see that there would be any other option" except lowering the wage, department spokesman Bill Thoennes said Tuesday. He said there will still be a public hearing on the question in early November, though the drop appears inevitable. The lower wage will take effect Jan. 1, 2010.

Advocacy groups for the poor have been warning of the wage drop since August, when the consumer price index for the Denver area was released.

Ohio and other states with adjustable minimum wages have seen their consumer price indexes fall. But Colorado is one of the few states where the law is interpreted to mean the wage can fall. Other states are planning to keep wages flat, according to AP.

In Florida, deflation would reduce the minimum wage to $7.21, but the state's minimum wage already matches the federal wage, so Florida workers' paychecks won't change.

Other states with minimum wages that are tied to inflation are Arizona, Missouri, Montana, Nevada, Oregon, Vermont and Washington.