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Business groups voice concern about Denver’s automatic minimum wage increase

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Robert Davis

(The Center Square) – Business groups are concerned about Denver's upcoming automatic minimum wage increase. 

Denver’s minimum wage will increase to $17.29 from its current level of $15.87 starting next year. For tipped food and hospitality employees, the minimum wage will also increase to $14.27.

The automatic increase is part of a law that Denver passed in 2019 tying minimum wage increases to the Consumer Price Index (CPI), which was up 8.94 percent, according to the city. 

“At a time when inflation and rising costs are impacting working families everywhere, this increase in our minimum wage, which is based on the Consumer Price Index, will help those who need it most,” Mayor Michael Hancock said in a statement last week. “We know this will put additional burdens on our local businesses, but this is an important tool to support vulnerable workers across the city.”

Small business groups like the National Federation of Independent Business say the rising minimum wage will put additional pressure on businesses when it's already increasingly difficult for them to operate. 

According to the latest national inflation data from the Bureau of Labor Statistics, consumer prices increased by 8.5 percent year-over-year in July while producer prices increased by 9.8 percent over the same timeframe. 

Tony Gagliardi, NFIB's Colorado director, told The Center Square that Denver's minimum wage increase will also put additional pressure on bordering cities “to raise their minimum wage to keep from losing their workforce.”

More than 50 percent of NFIB’s members said in a recent survey they are still facing difficulties in hiring. Another 46 percent said they’ve already raised wages to attract new employees. 

Restaurant owners are also concerned with the rising minimum wage as the industry already often operates on tight margins, according to Denise Mickelsen, a spokesperson for the Colorado Restaurant Association.

“Many will not be able to absorb this next increase under the current economic conditions,” Mickelsen told The Center Square. “When the city’s minimum wage ordinance passed in 2019, no one could have expected that the Consumer Price Index, upon which this increase is based, would be as high as it is. As such, we have grave concerns for the future of Denver restaurants and what the impact of this next increase will be without support from the Denver City Council.”