Yesterday, the Gazette was reporting on the departure of the Hewlett Packard call center for New Mexico. Net loss to Colorado of 800 jobs.
No reason was given for the move, but I will hazard a guess. My bet is that of the 800 folks who are losing their jobs, 700 of them voted to put the minimum wage on auto pilot. In doing so, they voted themselves out of a job.
Call center jobs are not typically high paying jobs.
Six months ago, the Colorado minimum wage went to $7.02/hour. The Federal minimum wage climbs to $6.55/ hour in July, but for the first six and a half months, the Federal minimum wage was $5.85. By being in Colorado, those 800 workers cost HP $1 million more from January through June than New Mexico workers would have cost. In the last six months of 2008, the additional cost would have been about $400,000.
The Gazette is reporting that HP wanted to increase the size of the call center to 2500 employees and will do so in New Mexico. Going forward to future years, it is reasonable to project that moving to New Mexico saved the company $4.5 million a year in wage costs.
While the minimum wage differential would have tightened up in 2009, it could be expected to widen in every year after that.
Even worse, a unions are trying to put two more issues on the ballot which will make it more expensive to be an employer in Colorado. In two short years, we have become a state that is very unfriendly to employers. The resulting job loss will only get worse.
It made sense for HP to move out of Colorado. We can expect more moves of this kind.
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