Denver Post editorial board: vote no on minimum wage hike

Colorado has yet another measure on the ballot this fall which would significantly jack up the minimum wage. It’s not the full measure sought by the Fight for Fifteen crowd, but it would be a steep climb nonetheless. Amendment 70 seeks to increase the minimum wage to $9.30 in 2017 and then bump it up each year by 90 cents until it hits $12 per hour in 2020. That’s a 44 percent increase in four years. While trying to sound as sympathetic as possible to the sentiments behind the effort, the editorial board at the Denver Post has come out against the measure saying that the results will hurt precisely the people the amendment proposes to help.

But it goes too far in some key ways and we worry that it could actually hurt low-wage earners more than it would help them, especially the young, new workers the law has traditionally served. We worry also that its price increases could disproportionately hurt Colorado’s restaurant industry, which would be dangerous in this state that benefits strongly from tourists — who spent more than $19 billion here last year…

The increase would be across the board, across the state, likely resulting in higher prices for goods and services as employers in all sectors, private and public, pass along costs to customers…

Another component of the proposal would raise the hourly base pay for wait staff at restaurants from $5.29 an hour plus tips to $8.98 and tips — a 70 percent increase. Expect less wait staff and more automation and other innovation meant to dodge the increased pay restaurant owners would have to pay, like surcharges in the place of tips that hurt industrious and talented servers.

All of these arguments are the same, common sense points which have been raised repeatedly in the national debate, but read that last paragraph again carefully. The Post is talking about the one area where there seems to be the most conflict in all of the protests we see. When you force food industry employers to pay the tipped server staff significantly higher wages, restaurants resort to all sorts of changes to keep themselves profitable. Menu prices go up first and staffing is cut back, using automation wherever possible. And they replace the expected tips with surcharges which are spread out among all the workers, depriving the best servers the chance to really get ahead. In the end, nobody is happy and more people wind up unemployed.

The “Fight for Fifteen” sounds great to social justice warriors, but it ignores economic realities which turn such measures into a poison pill. It’s good to see a major newspaper’s editorial board getting the message. Let’s hope the voters take heed.


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