Higher minimum wage in Boulder, Colorado puts strain on local restaurants
In November, Boulder voters approved the increase of minimum wage in the city from $14.42 to $15.57 per hour, which went into effect on Jan. 1. As the new year begins, Peter Waters, the T/aco restaurant owner, is taking a close look at his budget.
"We have about 50,000 labor hours a year, so $1.10 increase, you can do the math, is a quick $55,000 that we need to figure out how to adjust for in the coming year," Waters said.
One of those adjustments will show up on menu prices which is T/aco's first raise since the COVID-10 pandemic. "In addition to price increases, we are going to have to start adjusting labor hours and asking more of our staff," Waters said.
Studies have shown a higher minimum wage can help local economies reduce turnover and improve work ethic, all as the city works to catch up with high living costs.
"What about the guy who was making two times minimum wage but didn't get a raise this year? His taco prices went up; his burger prices went up; his rent went up," Waters said.
Nearly 20 years ago, a Colorado law was amended to say that tipped workers could earn $3.02 less than the state minimum wage at the time of $6.85, (making their wage $3.83.) That $3.02 tip credit is still the same today despite rising minimum wage. Now, as the city of Boulder's minimum wage rises above $15, Waters says it's putting a strain on balancing the cost of labor between tipped wait staff and the hourly kitchen staff.
"There's no way that we're going to say, OK, our tipped employees get a raise because the government says we have to. And the back of house, sorry, there's nothing left for you," Waters said. "We're trying to be as responsible as possible and sympathetic as possible to our staff's needs."
Waters is hoping the state will take a closer look at tipped wages, as minimum wages rise.
"It's puts us in a really tough spot to be able to come up with those kind of dollars every year without affecting the way our business operates. It' really, really challenging," Waters said.
The city of Boulder is set to continue increasing minimum wage as follows:
- Beginning January 1, 2025: $15.57 per hour
- Beginning January 1, 2026: $16.82 per hour
- Beginning January 1, 2027: $18.17 per hour
