Denver minimum wage increases again; restaurant owners say it’s a “huge cost”

At the start of the new year, some Colorado workers will get a bump in pay as Denver’s minimum wage will go up 52 cents, from $18.29 to $18.81.
The minimum wage has continued to see increases year-over-year. Back in 2020, the minimum wage was $12.85 per hour and then in 2021 jumped to $14.77 per hour. In 2022, the minimum wage increased to $15.87 per hour and then jumped to $17.29 last year.
The minimum wage increases come as great news for employees, but not for all business owners. Restaurant owners acknowledge Denver is an expensive city to live in and prices of everything are soaring, and because of that their employees deserve a livable wage.
“Historically, we’ve been underpaid in this industry,” said Lilliam Lu, the owner of Noisette Restaurant & Bakery in LoHi.
She added that raising the minimum wage is so important, because “people have an opportunity to have a more comfortable lifestyle and still work in the industry that they love.”
However, restaurant owners like her acknowledge the wage increases are having a large impact on the industry, which often already operates under small margins. With another increase coming in just a few weeks, many are sharing their concerns with the increased challenges that lie ahead.
Lillian Lu opened Noisette more than two years ago. Since opening the business, the minimum wage in Denver has increased almost $2.50, with another increase coming in January.
“$3 per person per hour is is definitely a huge cost for us,” said Lu. “Basically the only way that we can recoup that cost is to pass it on to our guests in raising menu prices.”
Beth Gruitch, the co-owner of Rioja, says the minimum wage increases cost her business about $37,000 last year. The restaurant absorbs many of those costs and other costs are passed down to the customers.
“The struggle is real out there,” said Gruitch. “The money is going to have to come from somewhere. We’re passing that along to the guests.”
Gruitch said it’s not just the minimum wage increase that has impacted business though, it’s the cost of everything that has gone up. But she believes her employees deserve a livable wage no matter what.
“Our staff works hard and we want to make sure that they do get paid and compensated fairly,” said Gruitch.
Pete Turner is the owner of Illegal Pete’s. With more than a dozen locations, he employs about 500 people and has been advocating for higher minimum wage for years.
“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?” said Turner.
At his business, he launched a living wage initiative in 2015.
“My theory was that we would get better people. They would stick around longer,” said Turner.
He acknowledges the challenges of balancing wages and still running a successful business. He added that paying his staff more has been a major investment.
“On average we were investing, is what I would call it, about $2 million extra a year in our staff,” said Turner.
But it’s a challenge Turner says he was willing to do the work for.
“It has been challenging for us to to manage our cost structure, to still continue to be profitable and to grow. But that was the work I was willing to take on,” said Turner.
In the meantime, Lu says she’s been managing labor costs as best as she can, and will continue to do so in the new year. So when it’s a slow night, they’re encouraging staff to go home early and eliminate overtime hours.
“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 of time,” said Lu.
Some restaurant owners are taking their business out of Denver where the minimum wage is lower. Vicente Baylon, whose grandparents opened Señor Burritos 34 years ago, said the minimum wage increase in Denver has been hard for the small business. They’re closing their location in Denver, keeping their Lakewood location open and opening a new location next year. They said closing their Denver location is a decision they did not make 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,” said Baylon. “Also with high price increases in groceries, it makes it harder for a small business to run.”
In a statement from Colin Larson, the Director of Government Affairs with the Colorado Restaurant Association, said: “Denver’s hourly minimum wage for tipped workers has risen almost 90% since 2019, and the minimum wage for non-tipped workers is up almost 65%. While well-intentioned, the truth is that when wages go up, so do menu prices so owners can afford to pay more for labor; then tips go up, too. This leaves the untipped kitchen crews behind, who already earn less than servers and bartenders. It just widens the pay disparity and hurts those who need an increase most.”