On the first of the year, New York was one of many states that saw another increase in the minimum wage. Those increases are scheduled to continue until the entire state is at $15 per hour. The same thing happened in Colorado, but it’s having a completely predictable and negative side-effect in at least one industry. Restaurants and bars, already reeling from the impact of the shutdowns and fewer potential customers venturing out for dinner during the pandemic, suddenly have to come up with the money to pay higher wages. For some of them, it’s simply been too much. CBS Denver spoke to some restaurant owners who have taken the drastic step of furloughing many of their employees, and other “adjustments” will have to be made as well if they hope to survive.
About 50,000 Denver workers will receive larger paychecks as the city’s scheduled minimum wage increase took effect on Jan. 1. Struggling industries, like food and beverage, appreciate the employee raise. However, some restaurant owners would prefer the City of Denver delay the increase.
“I had to furlough everybody with the exception of one,” said Brian Murphy, owner and Executive Chef at The 9th Door. “Increases should happen. It just came at a horrible time given the circumstances.”
The Colorado Restaurant Association says staff at many restaurants have been cut during the pandemic.
Even if you are a supporter of a higher minimum wage, you have to recognize that this is coming as a double whammy for owners of restaurants and bars. They’ve alternately been either shut down entirely or restricted to outdoor service or take-out for months on end. Those who fail to comply are hit with tens of thousands of dollars in fines and the potential to lose their liquor licenses. Turning a profit is an impossibility for many of them and they’re just trying to hang on until things return to some semblance of normality.