Denver’s restaurants are dying
“Denver’s high minimum wage, especially its low tip credit, has unintentionally undermined the financial viability of full-service, labor-intensive restaurants. As costs outpace revenue and margins evaporate, once-thriving independent establishments are closing in droves, eroding the city’s cultural fabric and economic diversity.
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Restaurant operators and advocacy groups agree that Covid sparked the decline, but rising costs since have continued to cripple the industry. Property taxes, utilities, insurance, food and drink prices, rent, and one of the highest minimum wages in the country — higher than in Los Angeles or New York — are straining already razor-thin margins.
The city’s low tip credit, which results in a high minimum wage for tipped workers, is a particular pain point.
Denver City Council unanimously passed a minimum wage increase in November 2019 — just four months before the pandemic hit — and it was fully implemented citywide by 2022. Today, the base minimum wage is $18.81 an hour and the tipped wage is $15.79 — increases of about 70 percent and 95 percent, respectively.
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Per 2019 legislation, wage increases are uncapped and rise annually with the Consumer Price Index. In 2026, the base wage will be $19.29. For operators like Ms. Tronco and Mr. Seidel, who said that labor now consumes more than half his revenue, the math no longer works.
“When you force an operator to give raises every January 1 to the group of people who’s already making the most money, it chokes our ability to give a salaried person or an hourly cook a raise,”
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To keep her business alive, Ms. Tronco has cut the hosts and bussers she hired when opening and reduced weeknight server shifts. She raises her menu prices every six months to keep up with costs. Her numbers have taken a hit: Sales are down an average of 10 percent this year.
“It just feels like whack-a-mole,” Ms. Tronco said. “Inflation has affected everyone … Now we’ve got a tariff situation and all my wine importers are telling me that everything is going to go up $3, $4 a bottle.”
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Mr. Padró said the small tip credit is the industry’s biggest burden. He supports a higher base wage, even up to $25, because most of his employees already earn above that. He said that his servers and bartenders average $38 and $44, respectively. Expanding the tip credit would alleviate some of the burden faced by operators.
“I have 17-year-old kids pouring coffee for their teachers, making more than them,” he said.”
https://www.slowboring.com/p/denver-piece