Small Businesses Owners Prepare For Minimum Wage Increase In Denver

DENVER (CBS4)- The City of Denver announced its proposal on Thursday to raise minimum wage beginning in January 2020. Denver Mayor Michael Hancock and Councilwoman Robin Kniech's proposal would elevate Denver's minimum wage to $13.80 an hour ‪on Jan. 1, then to $15.87 ‪on Jan. 1, 2021.

"Wage stagnation is a national challenge and has meant pain and a lack of opportunity for too many people for too long," Hancock said. "But Denver is leading the way to higher wages and a more inclusive and equitable economy. A raise for Denver's workers would mean families can better support themselves and better afford the city that they helped build."

Small business owners like Ryan Cobbin appreciate Denver's gesture, but don't necessarily think it's the right idea. Some believe the consequences of higher wages for nearly 100,000 workers, could outweigh the benefits.

"I agree with what Mayor Hancock is doing, but I don't particularly like it," said Cobbins, owner of Coffee at the Point in Denver.

Cobbins hasn't raised his prices in two years, despite the increase in ingredient costs. It's a burden he didn't want to put on his customers, but managed to accomplish without laying off employees.

"We do a lot of charitable giving; donating coffee, gift cards. We've minimized that so we don't have to pass that price increase onto customers," explained Cobbins.

It's not his ideal way of cutting costs, but that cushion has kept prices low and his 23 employees employed. Now that wages around Denver could go up, he's thinking about what he'll have to cut in January.

Cobbins already gives his staff raises throughout the year, but wage increases could be hard to budget.

"We have to do increases for our staff, so our vendors will likely do the same increase. Ninety-five percent of the companies we partner with are all local," said Cobbins, explaining the impact of the increasing cost of labor.

Cobbins won't compromise quality with cheaper products. He has the option of cutting back employee hours, but then staff, customers, and ultimately the business will suffer.

"We'd have a mess with a decrease in customers because they come in, they're not getting served as fast as they could be, and they'd end up going somewhere else," said Cobbins.

He says a price increase is inevitable for many businesses next year, not just at his coffee shop. His workers who would benefit from the raise are also someone's customers after close.

"Yes minimum wage increases, but then there's more coming out of your pocket to pay for the same goods you paid for before," said Cobbins.

According to Denver, higher wages aren't just about making ends meet.

"This proposal should also help employers attract and keep more workers in a competitive labor market, reducing the costs of turnover," said Kniech.

The council could vote on the proposal as early as November.