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Struggling Restaurants Concerned About Denver's Minimum Wage Increase

DENVER (CBS4)– 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.

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"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. A wage increase would only exacerbate the problem. With revenue so low, Murphy says customers will feel the impact of the wage increase, too.

"The drivers of these trucks, the people picking the products in the warehouses, the vendors, the sales reps. All of that will increase. It's going to be across the board," said Murphy.

Murphy says he'll likely have to increase the price of some menu items to afford the wage increase. Throughout the pandemic, some restaurants have added additional fees to support employees.

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"More and more restaurants adopted fees like that to be able to say to the customer 'This is what it costs for someone to work here and live in the city,'" said Denver Councilwoman Robin Kniech. "I think it's really important for businesses to charge what it costs for their services."

Kniech says the city understands their concerns. But the workers who would benefit also include people on the frontline, like grocery store and health care workers. She says bigger paychecks would also help stimulate the economy.

Denver Mayor Michael Hancock discussed the possibility of delaying the minimum wage increase with stakeholders due to the economic impact of the COVID-19 pandemic. A spokesperson for Hancock said the mayor decided against the delay after careful consideration.

Mayor Hancock and Denver Councilwoman Robin Kniech released the following statement to CBS4: "While recognizing the challenges to businesses throughout the COVID pandemic, as co-sponsors of the minimum wage increase adopted by City Council in 2019, Mayor Hancock and Councilwoman Kniech intend to keep the planned minimum wage increase in place and will not advance a council action to delay.
This was not an easy decision, but as our economy recovers – and we know it will – we don't want to leave behind our minimum wage workers, who are often frontline workers in the pandemic and disproportionately women and people of color. Putting additional dollars into the hands of workers also provides an economic stimulus by increasing their ability to spend."

The city says two thirds of the workers in Denver who earn minimum wage are people of color. They're also disproportionately women. This year the city is trying to focus on racial equity. Kniech says this economic measure is one of the most impactful things that the city can do.

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"Wages are one small piece of the operating cost for a business and that's not insignificant, but you can't just ask low wage workers to make the rest of the economy work when these other pieces, that the federal government are responsible for, are broken," said Kniech.

The city has and will continue to support small, local businesses with financial relief, creative patio expansion programs, and other assistance to help them stay in business. The $14.77 per hour raise was approved by Denver City Council in 2019.

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