At the start of the new year, some Colorado workers will see an increase in pay as Denver’s minimum wage rises 52 cents, from $18.29 to $18.81.
The minimum wage has steadily increased year after year. In 2020, the minimum wage was $12.85 per hour, and in 2021 it increased to $14.77 per hour. The minimum wage grew to $15.87 per hour in 2022 before rising to $17.29 last year.
The minimum wage rises are good news for employees, but not for all business owners. Restaurant owners recognize that Denver is an expensive city to live in, with rising prices for everything, and that their employees deserve a living salary.
“Historically, we’ve been underpaid in this industry,” said Lilliam Lu, proprietor of Noisette Restaurant & Bakery in LoHi.
She went on to say that raising the minimum wage is critical because it allows people to live a more comfortable life while continuing to work in their preferred industry.
However, restaurant owners like her recognize that wage rises are having a significant impact on the industry, which already runs with thin margins. With another rise expected in just a few weeks, many people are concerned about the increasing hardships that lie ahead.
Lillian Lu founded Noisette over two years ago. Since the company’s inception, the Denver minimum wage has risen by over $2.50, with another raise scheduled for January.
“$3 per person per hour is a huge cost for us,” pointed out Lu. “Basically the only way that we can recoup that cost is to pass it on to our guests by raising menu prices.”
Beth Gruitch, Rioja’s co-owner, claims that minimum wage rises cost her company $37,000 last year. Many of these costs are absorbed by the restaurant, while others are passed on to guests.
“The struggle is real out there,” explained Gruitch. “The money will have to come from someplace. We’re passing that on to the guests.”
Gruitch stated that it is not simply the minimum wage rise that has harmed the company, but also the rising cost of everything. However, she believes that her employees deserve reasonable pay regardless of the circumstances.
“Our staff works hard and we want to make sure that they do get paid and compensated fairly,” according to Gruitch.
Pete Turner is the owner of Illegal Pete’s. With over a dozen outlets, he employs over 500 people and has long advocated for a higher minimum wage.
“I wondered, was there a way that we could make the wage more equitable and more livable and still run a successful business and grow?” stated Turner.
In 2015, he established a living wage program for his company.
“My notion was that we’d attract better people. “They would stay longer,” Turner said.
He recognizes the difficulties of balancing wages while yet operating a successful firm. He stated that paying his employees more has been a significant investment.
“On average, we were investing, is what I would call it, about $2 million extra a year in our staff,” according to Turner.
However, Turner believes he was willing to take on the challenge.
“We have struggled to maintain our cost structure while remaining profitable and growing. But it was the work I was willing to take on,” Turner explained.
Meanwhile, Lu says she’s done her best to manage labor expenditures and will continue to do so in the new year. So, on slow nights, they encourage employees to leave early and avoid overtime.
“I think the thing that’s very challenging for us as a small, independent restaurant is the amount of hikes that have happened in such a short period,” Lu told me.
Some restaurant owners are moving their businesses out of Denver, where the minimum wage is cheaper. Vicente Baylon, whose grandparents founded Señor Burritos 34 years ago, stated that the minimum wage increase in Denver has been challenging for small businesses.
They are closing their Denver site but will keep their Lakewood facility running and launch a new location next year. They stated that closing their Denver facility was not a choice they took lightly.
“With the minimum wage increase, we would have to increase our prices on our menu higher and it would be hard for our customers to pay for food,” Baylon informed me. “Also with high price increases in groceries, it makes it harder for a small business to run.”
According to Colin Larson, Director of Government Affairs for the Colorado Restaurant Association, Denver’s hourly minimum pay for tipped workers has increased by over 90% since 2019, while the minimum wage for non-tipped workers has increased by nearly 65%.
While well-intentioned, the truth is that as wages rise, so do menu prices, allowing proprietors to pay more for workers; tips also rise. This leaves the untipped kitchen personnel behind, as they already earn less than servers and bartenders. It only deepens the pay gap and harms those who need it the most.”