A new Colorado law has recently caught the attention of national media. As businesses create more remote jobs than ever before, the “Equal Pay for Equal Work Act” has persuaded many of them to exclude Colorado residents from those opportunities.
That’s certainly a blow for a state that has gone from the nation’s lowest unemployment rate to one of the highest in a few short years, but the national media are missing the real story on the ground in Colorado.
The new law is only one in a long list of recent policies wreaking havoc on Colorado’s economy under the leadership of Governor Jared Polis.
Wage-discrimination law hurts Colorado workers
The Wall Street Journal first brought the remote-work story to national headlines with an alarming lead: “Big companies are hiring for remote positions that can be performed in any state across the U.S. except one: Colorado.”
To blame is a 2019 state law signed by Governor Polis just a few months after the start of his tenure. The legislation, which went into effect at the beginning of this year, requires employers “to disclose the hourly or salary compensation or a range of hourly or salary compensation for all job postings,” according to a legislative staff summary of the bill.
If companies fail to comply, they are subject to a penalty ranging from $500 to $10,000 per violation.
In response, many companies are including a caveat on postings for remote jobs, such as one from Johnson & Johnson: “Work location is flexible if approved by the Company except that position may not be performed remotely from Colorado.”
Even PETA, a longtime darling of the Left, has refused to hassle with the Democrat-backed wage-discrimination law, according to records from coloradoexcluded.com. At least two postings from the organization have excluded Colorado applicants.
As with progressive policies, good intentions are proving damaging to the very people they’re intended to help.
In a 2019 Op-Ed published before the bill passed, Joni Inman, executive director of the Colorado Women’s Alliance, prophetically observed, “This bill hurts women. It eliminates opportunity rather than promoting it.”
Rather than helping women in the workforce, the law is disqualifying them from certain jobs entirely — along with everyone else in the state.
National media outlets astutely spotted the threat to Colorado workers in the so-called “Equal Pay” law, but in truth, they’re only seeing the tip of the iceberg. Under the surface is an ominous mass of policies poised to sink the state if our governor doesn’t change course.
The wage-discrimination law, among other job-destroying policies, is quickly earning Colorado’s first-term governor the nickname “Governor Unemployment” among critics in the state, and for good reason.
In 2017, Colorado boasted the lowest unemployment rate in the nation. Since Polis took office in January 2019, the state has adopted a series of new policies that have driven Colorado’s unemployment rate to a dismal 37th place.
Anti-energy oil and gas regulations
A 2019 law to overhaul the state’s long-standing regulatory regime for the energy industry has already eliminated nearly 8,000 jobs, according to reporting from late last year. It transformed the Colorado Oil and Gas Conservation Commission from a regulatory body to an anti-fossil-fuel activist organization.
A Colorado Open Records Act request uncovered emails from employees at the agency, which referred to the state’s oil companies as “Snake Oil Inc.,” “Bad Oil and Gas” and “Acme Company.”
Backed by Governor Polis, the law passed through the Democrat-controlled General Assembly after voters rejected a nearly identical ballot measure the year before.
Minimum wage
Just a few months before the state lost its rank of lowest unemployment in the nation, a minimum-wage amendment to the Colorado constitution went into effect. It’s now $12.32 per hour, the sixth highest in the nation. Polis followed that up with a 2019 law allowing local governments to raise their minimum wages above the new state minimum.
Countless reports and anecdotes point to a rising minimum wage causing business closures, job losses, and reduced hours for employees.
The owner of Chef Zorba’s Authentic Greek Cuisine, Karen Lukanic, told “The Faces of $15” that she was forced to stay open less and cut work hours for staff after Denver further raised the minimum wage for wait staff. That’s despite servers already generating “$100 in tips on any given day, and it’s frequently double that,” according to Lukanic. Her workers are only a few of the victims of Polis’s minimum-wage increase.
Rising payroll taxes
Last year, voters approved Proposition 118, now the most generous paid family and medical leave law in the nation. The law will likely reduce wages and serve as a deterrent to businesses considering opening in or relocating to Colorado.
According to analysis by the nonpartisan Common Sense Institute, “Total premiums to be paid by employers could total over $1.34 billion . . . an effective increase of the corporate income tax of 204%.” Economic modeling from the institute shows that personal income taxes for a worker earning $50,000 a year could rise between 8 and 18 percent because of the law.
While voters adopted the measure through the ballot, Polis declined to use his influential platform and popularity as governor to oppose the measure. His political allies forcefully backed it.
Attack on agriculture
On the last day of the 2021 session, the legislature passed the Farmworker Bill of Rights, which would impose burdensome new wage and labor laws on the agricultural industry. The law will likely hurt the very workers it aims to help.
A spokesperson for the Colorado Farm Bureau explained, “Operating on razor-thin margins and weather timelines, farmers would be forced to cut back on workers’ hours, hiring more employees who work fewer hours to get the job done on time.”
Agriculture is a seasonal industry. Workers depend on long hours for part of the year to generate the income they need to support their families. For this reason, the industry has traditionally enjoyed exemptions from federal and state overtime regulations. The legislation repealed that important exemption at the state level, which will force agriculture businesses to cut the work hours laborers want and need.
In addition, global commodity prices dictate what the industry can fetch for its goods, leaving little margin for agriculture businesses to adjust to the new cost burdens.
Polis signed the bill into law in late June.
Oversized unemployment benefits
Last month, Colorado’s GOP congressmen sent a joint letter to Governor Polis urging him to end the $300 per week in extra unemployment benefits currently offered by the federal government. The letter explained that the added benefits are “incentivizing workers to stay home” and contributing to higher levels of unemployment.
A survey conducted by the Colorado Restaurant Association from April 23 through May 7 reveals that “more than 90 percent of Colorado restaurants are currently having trouble hiring staff,” and “65 percent of operators believe the primary hiring obstacle is workers preferring to remain on unemployment benefits.”
Similarly, a survey by the Colorado Chamber of Commerce found that “37 percent [of surveyed businesses] say that their company is currently experiencing difficulty hiring employees due to unemployment benefits exceeding wages.”
Responding to the congressional delegation’s letter, Polis adamantly refused to end the disincentive to work, arguing that paying people more not to work than to work has and will continue to “stimulate the economy and bring struggling businesses back from the brink.” Instead, he has offered those collecting unemployment up to $1,600 in taxpayer money as an incentive to fill open positions.
A majority of governors across the nation have announced an early termination of the bonus unemployment benefits.
A tax-and-fee hike frenzy
In addition to new laws and regulations discouraging hiring, Polis’s tenure — and this legislative session in particular — has brought a glut of new taxes and fees on businesses and residents without the voter approval required under the state’s constitution.
This year, the legislature passed 45 revenue-raising bills that together will generate upwards of $600 million in new taxes and fees annually.
Polis supported an infrastructure bill in the style of the Green New Deal that will generate nearly $4 billion in new taxes over the next decade. The legislature evaded the constitution’s requirement for voter approval of new taxes by labeling the taxes as “fees.”
The so-called “Tax Fairness for Coloradans” package will increase taxes by a combined total of $372 million in fiscal year 2022-23, by the legislature’s estimates. The package decouples state tax law from federal provisions, which provide tax benefits to businesses. It mirrors a bill from last year that removed at the state level certain tax benefits passed by Congress under the CARES Act to help struggling businesses weather the effects of the pandemic.
The bills take some of the new revenues extracted from job creators and use the money to extend tax credits to illegal immigrants.
On the campaign trail in 2018, Polis promised to eliminate tax loopholes and reduce taxes for all. Last year, he signed an income-tax bill into law that increased state revenues by eliminating certain tax deductions. He then supported an income-tax reduction, which citizens approved in the November election, offsetting the increases. This year, however, he seems to have forgotten his promise. He has already signed SB21-260 and HB21-1311, eliminating tax deductions and increasing taxes by hundreds of millions of dollars annually, but has yet to propose offsetting tax cuts.
Colorado’s declining economic climate
This year’s “Rich States, Poor States” report by the American Legislative Exchange Council ranked Colorado as the second most economically attractive state in the nation for the decade spanning from 2009 to 2019. Due to unfavorable public-policy changes, however, the report forecasts the state will fall 18 places relative to other states in the coming years.
This does not bode well for Coloradans in the workforce or for those seeking gainful employment.
From February through April, the state’s unemployment rate stayed stagnant at 6.4 percent despite the economy adding 25,000 new jobs. Bureau of Labor Statistics (BLS) data doesn’t explain this paradox, but it appears that the unemployed were not filling the jobs the economy created. That’s likely thanks in large part to enhanced unemployment benefits, which Polis has refused to end. The most recent May jobs report from the BLS showed slight improvement over April, with the rate falling to 6.2 percent, still well above the national average of 5.8 percent. Relative to other states, however, Colorado’s position remained unchanged.
While the whole country has suffered from the effects of the global pandemic, Colorado has fallen behind relative to many other states, suggesting that more than just the virus is to blame.
Lessons learned…maybe
It’s clear that Colorado’s unemployment problems go far beyond employers excluding Coloradans from remote job opportunities.
But what is the lesson from all this?
In the words of President Obama, “Elections have consequences.” Coloradans elected a governor whose policies have encouraged unemployment. They are now realizing the consequences.
Ben Murrey is fiscal policy director at the Independence Institute, a free market think tank in Denver. A version of this article first appeared in National Review.
