Denver’s government will guarantee workers a base hourly rate of $15.87 when the clock strikes 2022. The minimum wage will rise each year before then — and after, too.
The City Council voted 11 to 0 to raise the wage Monday night, just two months after Mayor Michael Hancock and City Councilwoman Robin Kniech publicly pitched the idea. City Council members Chris Herndon and Stacie Gilmore were absent.
Business owners will absorb the hike over three years. Workers who currently make the minimum wage of $11.10 will make $12.85 starting Jan. 1, 2020, and $14.77 in 2021. After the minimum wage reaches $15.87 in 2022, it will be pegged to the consumer price index. In other words: as life costs change — transportation, food, healthcare — the minimum wage will change with them.
It’s important workers start earning higher wages “right away,” Kniech said, “because they were so far behind the cost of living in Denver.”
The law will disproportionately help women and people of color, projections show.
In a statement, Hancock said, “While Denver’s economy has thrived over the past few years, our economy still does not work for everyone. This increase to Denver’s minimum wage will provide a little bit of relief for those who are struggling the most — families who must choose between putting food on the table and paying rent or buying medicine.”
About 15,000 workers who live and work in Denver will benefit immediately, according to city documents. In 2022, about 90,000 will receive higher wages. Neither of those figures include people who work in Denver but live outside of the city proper.
“As a janitor whose job it is to clean the buildings of the wealthiest corporations in our city, my coworkers and I feel overloaded,” said Pedro Carillo, who spoke in favor of the bill through an interpreter. “Raising our wage makes it more affordable for us to survive.”
One business owner at Monday’s City Council legislative meeting spoke in favor of the wage hike and no business spoke against it, but plenty of business owners sit on both sides.
The Colorado Restaurant Association become the face of the opposition, arguing that the law would create a pay chasm between back-of-the-house workers (dishwashers and chefs) and servers in the front-of-the-house. Restauranteurs can pay servers less because they get tips, but raising their pay along with other employees would hurt the industry, industry representatives said.
“It forces (owners) to give a raise to the front-of-the-house employees when they want to give a raise to back-of-the-house employees,” Sonia Riggs told Denverite. “So when this happens, they have very few options for how they’re going to accommodate that change because they also have a family to feed.”
The association has threatened to sue Denver over the law.
Other business owners came out against the wage hike because they worried about staying in the black — and even drifting toward automation.
“This increased cost would have to be absorbed,” said Mike Bowers, president of Harkins Theatres, which has a cinema in northeast Denver. “Likely this could mean a reduction in the number of jobs, hours and benefits for employees, and an expedited transition to automated technologies.”
Small businesses comprise the bulk of Denver’s and Colorado’s businesses, according to the U.S. Small Business Administration.
Councilman Kevin Flynn co-sponsored the bill but was realistic about its consequences, good and bad.
“This is going to be difficult for small business and I think we need to acknowledge that … but you know what, the price of subsidizing the social costs that we’ve been doing, they’ve been pretty difficult also.”
Kniech addressed the opposition Monday by citing studies in other cities that raised wages before Denver.
She also admitted that studies have limits.
“Some people really deeply believe that higher wages will destroy businesses,” Kniech said. “In spite of 20 years of studies that are peer-reviewed by economists, the studies are not gonna change folks’ values. And I also know that studies are an aggregated overall commodity and they do nothing to predict what will actually happen to one person’s business.”
Kniech and Hancock met with business owners — they had to, under law — and lowered the initial wage hike as a result. They also gave entrepreneurs more time to raise it. It wasn’t enough to get the restaurant industry on board.
In a letter, Tattered Cover owner Len Vlahos called the law a “strong and sensible proposal to help working families, while also giving small, locally-owned businesses, like Tattered Cover, time to prepare and adapt.”
This article was corrected to reflect the fact that one business owner spoke in favor of the ordinance.