Colorado’s minimum wage for tipped employees would increase by 70% by 2020. Restaurants already operate on slim profit margins and any increase in payroll expenses could mean that small business have to be extremely conservative with what little resources they have to operate with. It’s estimated that just under half of the workers that would be impacted by the minimum wage increase are older than twenty and have some college education. Making a higher wage would allow these workers to spend a manageable number of hours at work each week instead of working sometimes over fifty hours to support themselves. In fact, a minimum wage increase has the potential to increase wages for up to twenty percent of households across Colorado.

Supporters of a minimum wage increase say that higher paid employees will stay in their jobs longer, which can reduce costs for businesses in the form of vacancies and training. An increase minimum wage can lead to employees taking fewer sick days and being more productive while on the job. However, increasing the minimum wage would also affect small businesses. Businesses can’t just pay employees more money without either reducing their profits or increasing their product prices to offset the increase in payroll expenses. Minimum wages are increasing across the nation, and businesses are going to have to find a way to carry both the increased payroll expenses and staff expenditures.

Colorado business owners are trying to find the perfect balance between higher product prices, employee hours, and identifying ways to cut extra costs in order to make the wage increase work. The Colorado Restaurant Association put together a survey and nine out of ten survey respondents said that they would have to increase costs to offset the wage increase while just about half said that they would have to close one of their locations to make things work. One solution that business owners have identified is to cut back on intensive labor practices like cooking meals from scratch, so more restaurants could start ordering pre-prepared staple goods in order to cut down on the number of hours they have to pay to employees to prepare food.

We wrote Thomas Perez, United States Labor Secretary, Senator Michael Bennet, Senator Mark Udall, and Representative Cory Gardner to tell them how our members would be impacted by raising the minimum wage in Colorado. We elevated your voice to let legislators on both sides of the issue know how their decision could impact business owners and their families across the entire state. AfeUSA believes that by expressing the needs and desires of our members, politicians will find a way to allow Americans to earn a fair wage while supporting small businesses.