Lindy Spiegel loves her job at Yogo Mojo, helping sweet-toothed customers load up on frozen yogurt and toppings. It's the first job for the 18-year-old Grand Junction High School senior, and she's happy to be making some spending cash.
The extra cash that accompanied a 90-cent bump in the state's minimum wage — it's up to $10.20 an hour as of last month — helps her save a little more as she prepares to head off to college next year.
"I feel like that's a huge difference to be paid hourly," Spiegel said about Colorado's series of annual wage increases. "It does add up."
While the minimum wage increase is a boon for Spiegel, it's a burden for others, including Discovery Kids Learning Center owner Kirk Huddleston, who has already raised prices twice and plans to do the same with each minimum wage increase until 2020.
"I grimace when November comes around and I have to do this, but I don't want to do this," he said about telling parents about pending day care cost increases.
No matter who you are, voter -approved Amendment 70 is likely affecting your pocketbook. In the 13 months since Colorado's minimum wage began increasing from $8.31 an hour, many blue-collar workers on the lowest rungs of the wage ladder are cashing plumper paychecks, business owners are juggling how they're compensating for the pay increases and consumers are paying more for many services and products. If by chance the wage increase hasn't affected you yet, it will soon.
The net result is a mix of complaints about higher prices and slimmer bottom lines and praise from economists who say the wage increases are helping far more people than they hurt.
While Colorado's wage increases add more cash to paychecks of the state's lowest-paid workers, employees may not actually earn more money because of cutbacks to their total number of hours worked or reductions of other benefits, said Diane Schwenke, president and CEO of the Grand Junction Area Chamber of Commerce.
The chamber opposed Amendment 70, claiming it doesn't allow any flexibility for business owners and doesn't account for any "unintended consequences" that could increase costs to business owners, Schwenke said.
Because of the wage hikes, business owners must make decisions whether to cut labor costs or increase budgets, she said. An increase in tabletop credit card readers at chain restaurants, which curtails some of the need for food servers, is one of these direct impacts, she said.
"You're going to see a lot more of that," Schwenke said. "We're definitely seeing technology being employed as a way to offset the increases."
She said some businesses report they must cut employees' hours or pass along costs to customers to absorb the wage increases.
"We predicted what would happen, that costs to the consumer are going to go up," she said. "The raw buying power isn't going to match what's in the paycheck. Already there's a lot of businesses that are struggling to provide health care and paid time off. When you look at your earnings overall, you may not see a net increase."
CONSUMERS PAYING MORE
Since the minimum wage kicked in last year, parents pay an extra dollar a day for child care at Discovery Kids Learning Centers in Grand Junction and Fruita, Huddleston said.
Huddleston said he's received a few negative comments from parents about the increases, but he's surprised the pushback hasn't been greater. Parents pay $35 to $39 a day for full-time care of children ages 1 to 3.
His staff of 40 teachers plus other workers earn anywhere from minimum wage up to about $17 an hour. To maintain parity among wages, everyone gets a $1-an-hour raise in connection with minimum-wage increases.
"To me, that's how I am combating this," he said, adding he didn't back Amendment 70. "If my experienced staff are making $14 an hour and they don't get a raise, they're getting a pay cut if their costs go up. I like to be really competitive with my experienced staff."
Visitors are also paying more at the Fruita Community Center. Daily use rates bumped up from $6 to $7 to pay wages of the center's minimum-wage workers. Roughly 80 percent of the 60 to 80 employees of the city-owned-and-operated recreation center make minimum wage. Adding $1 an hour to those wages adds $110,000 in annual operating costs. Aside from January's rate increase, the center has held rates steady since 2011.
Ture Nycum, director of Fruita's Parks and Recreation Department, said he made sure to clearly communicate to the public that rate increases are specifically tied to minimum wage rates.
"Raising rates is concerning to me," he said. "We always want to be cognizant of taxpayers' dollars. I would say by and large our patrons have been completely understanding."
Rates at the rec center will hold steady in 2019, but officials will re-evaluate and may increase rates again in 2020, Nycum said.
The higher minimum wage has significantly impacted restaurants, farms and other businesses, which have had to adjust staffing and payroll while planning for more changes with pay set to rise for another two years.
At 626 on Rood, a fine dining restaurant in downtown Grand Junction, owner and head chef Theo Otte said the additional 90 cents an hour he has to pay each server equates to an extra $15,000 spent per year on salaries. Servers will be making $8.98 per hour by 2020. Though sales were up in 2017, Otte said the business is essentially "treading water."
Another issue Otte has to consider is how to handle his kitchen staff. None makes minimum wage salaries, but some are making a little more than the $12 per hour threshold and will need raises soon. With that in mind, Otte in November instituted a 2 percent surcharge for each customer bill that will go toward the "back of house" staff, who are not tipped employees.
He estimates the surcharge raises wages for his kitchen staff by $1 an hour on average. Employees receive the surcharge payments every two weeks in a paycheck.
"I think we have a good game plan on this," Otte said.
Otte did this in lieu of raising menu prices this year and said it gave the staff a good incentive to turn out orders quickly.
Otte noted that the Colorado Restaurant Association was one of the biggest opponents of Amendment 70 because of its potential impact to a restaurant's bottom line, as it will have to pay servers more in base pay before tips. He also wonders if the tipping system set up at restaurants should be a thing of the past, as it creates a discrepancy in pay between the front and back of the house.
"I'm not taking away from the hard work the staff has done, but the system has an archaic setup that kind of worked and has kind of been blown up by increases," he said.
A few blocks away, Main Street Cafe owner Evan Gluckman is facing the same dilemma, pondering how to increase pay for the kitchen staff. Gluckman said no one in the kitchen makes below $10.50 an hour, but that will obviously change next year once the minimum wage ticks up again.
Gluckman also believes he will have to significantly raise the salary of many of the kitchen staff making more than $12 in the next few years to create separation between skilled positions, such as a cook, and unskilled positions, such as a dishwasher.
That said, Gluckman supported the minimum wage increase and still would today. He said he slightly raised menu prices last year, but has not done so yet in 2018. He's considering another slight increase later this year.
"I think we're doing OK," Gluckman said. "We have a pretty successful business, I would just like to stay with the pace."
MORE BUSINESSES IMPACTED
Restaurants are mostly feeling the brunt of the increase through pay raises, but owners note that costs are also rising, especially if they buy goods from local farmers, such as Blaine Diffendaffer, owner of Blaine's Tomatoes and Farm in Clifton.
Diffendaffer has always tried to start his workers a bit above minimum wage, but he said that has become increasingly difficult.
When a farm worker could make $11 an hour as opposed to $9.30, he was pretty competitive. But at $10.20, or next year at $11.10, it becomes tougher. Diffendaffer said he typically wants his wages at about 25 percent of his sales, but he's had to re-evaluate that number. Diffendaffer employs six people at the farm and two more at Blaine's Farm Store.
"Wages have gone up to a point where I have to watch the profit," he said. "In a nutshell, I'm unfortunately having to raise my prices."
Raising prices, however, is a slippery slope as Diffendaffer tries to stay competitive with supermarket prices.
"If you do pay (employees) $15 an hour, not many people will buy your stuff because it's too expensive," he said.
It's gotten to the point where Diffendaffer has started to ponder using the federal H2A program, where he can bring in experienced temporary workers from other countries — mostly in Latin America — provide housing and pay them around $13.50 an hour.
Diffendaffer said he knows some of the larger farms in the Grand Valley have gone this route, but he has thus far balked at the idea since he doesn't have housing available and doesn't need as many workers as others, making the $2,000 registration fee less cost-feasible.
In the coffee shop industry, Dee Coram, who owns Grand Junction's Traders Coffee and Tea and three other coffee shops in Montrose, has been tackling this issue by trying to be creative to avoid reducing staff. He's added a tip allowance on credit cards to increase pay for workers, and the business raised prices slightly on Jan. 1, which Coram said is the fifth price increase in 18 years. Two of those increases have come in the past few years, though, because of the bump in the minimum wage.
"Essentially we haven't seen any increases in our traffic counts with customers or growth or exponential growth in the business, but our payroll continues to go up every year," Coram said.
He added that it's also been difficult to give merit-based raises as many of the new employees have to start making a similar wage to someone who has been with the company for a long time.
"When you have an experienced worker and have to pay a higher wage to a younger person who is learning, that's difficult," he said.
Most employees make more than minimum wage at the various Mesa County Libraries branches, but the state-mandated wage increases will boost pay to some degree for the organization's approximately 90 employees, Mesa County Libraries spokesman Bob Kretschman said.
"What this did when the minimum wage increased, it sort of makes us adjust the pay ranges above that," he said.
The library district is budgeting an additional $350,000 — a 12 percent increase — in the compensation budget for employee wages through 2020. The district aims to keep employee revenue and benefits at 60 to 65 percent of its overall costs. It's likely employees will have to pay more for benefits to make up the difference, Kretschman said.
Library officials want to maintain their level of service to the public, so cutting employee hours isn't an option to save costs, he said.
"We can't raise revenues. We don't charge for our services. We have to live within that cap," Kretschman said.
Even in lean years, employees at the nonprofit Hilltop Community Resources receive a 2 percent yearly wage increase to accommodate for cost of living adjustments, CEO Mike Stahl said.
Stahl agrees the minimum wage hike is a positive benefit for workers, but making the numbers work for the agency is tricky. Hilltop maintains a $17 million annual payroll and expects to pay an additional $1.5 million in wages through 2020 because of the minimum wage increase.
"We have a 1 to 2 percent margin," he said. "We have to look for other revenue."
Hilltop employs close to 600 employees, with more than a third of those employees working in the nonprofit's "care-giving" operations and earning a bit above minimum wage, he said. A recent online job posting advertised a Hilltop certified nursing assistant position for $11 to $11.67 an hour, plus a hiring bonus.
In two years, the starting rate will be moot, when the minimum wage hits $12.
To try to generate more revenue, Hilltop opened six more independent living cottages and plans to open more. The independent living homes require fewer staff members, as opposed to The Commons and The Fountains assisted-living facilities, which require three shifts of employees for 24-hour coverage, Stahl said.
Employees haven't been vocal on whether the wage increases are helpful, but $10.20 an hour is still a low wage, he said. That may change when wages near the $12-an-hour range and employees start to make too much to qualify for other government assistance.
"It's a little early to tell," Stahl said about the changes. "When it gets closer to $12 an hour, that's about the window where it starts hurting. The hope is that it doesn't help people in one way and hurt in another."
Crystal Austin, a care specialist at The Commons, adores working with residents, but her hourly rate of $11.90 is difficult to live on.
"It's a struggle," she said, taking a brief break last week from helping residents.
Austin makes too much to receive any government assistance, but she wants to earn a certified nursing assistant license or complete other training to earn more.
HELPING LOW-WAGE WORKERS
More than a quarter of workers in Colorado — around 634,000 — were classified as low-wage workers, earning less than $12.48 an hour in 2016, according to a study by the Colorado Fiscal Institute. In Mesa County, about 26 percent of workers are considered low-wage.
About half of all low-wage earners are 30 years or older, with an average age of 34, and women and Hispanics are most likely to work these jobs, the report showed.
Chris Stiffler, an economist with the Colorado Fiscal Institute who published a study in September, believes the wages will help Grand Junction and Mesa County residents more than people on the Front Range as the Grand Valley has a lower cost of living. Overall, Grand Junction residents earn on average about $17 per hour, while Denverites earn more than $20 per hour.
He also noted that this hike brings wages closer to the values they were in the 1960s when the minimum wage was about $1.60 per hour. Accounting for inflation, a minimum wage of $12 an hour by 2020 catches the state up with that rate of pay.
"This basically restores the historic value of the minimum wage," Stiffler said.
Statewide data for employment and wages for 2017 won't be readily available until May, yet some economists and others who supported the passage of Amendment 70 say there really haven't been any surprises so far and the increase has helped far more than it has hurt.
They cite historically low unemployment numbers throughout the state, particularly on the Front Range. Mesa County's unemployment rate sits at around 3 percent. Wages are also starting to increase, thanks in part to the low unemployment rate.
"It benefits 10 times more workers than are losing jobs," University of Denver economics professor Jack Strauss said. "That can help through purchasing power."
Strauss took part in a 2016 study looking at the impacts of a $12 minimum wage on women in Colorado. The study claimed that raising the minimum wage would help 290,000 women across the state earn more income. Also, more than 50 percent of minimum wage workers are women, nearly 90 percent are above the age of 20 and the median age is 30 years old. Strauss stressed it is important to note that raising the minimum wage doesn't simply help high school workers at their first job. The vast majority of minimum wage workers are adults, many of whom have families to help support.
Without hard figures on wage increases in 2017, Strauss said he feels the first year of the minimum wage increase has been successful and he expects that to continue.
"Colorado's economy has continued to improve — despite the naysayers — and Colorado continues to have lower unemployment than the national average, despite higher minimum wages," he said. "It vindicates the movement."
This movement was partially led by the Colorado Center for Law and Policy in Denver, which campaigned for the passage of Amendment 70 in 2016. The center is an advocacy group that promotes and provides research on fiscal policies, health care access and economic security.
Manager of research and policy analysis Michelle Webster said the amendment was necessary because wages had been stagnant, while the cost of living had gone up considerably.
"What we've been finding over the last several years, certainly during the economic recovery period, is that while wages at the low end of the income spectrum have been gaining ground, they are still below what folks were earning prior to the recession," she said.
According to Webster, most industries seem to be thriving, even while dealing with wage increases. She noted that the restaurant industry was expected to exceed $12 billion in sales in Colorado for 2017.
She expects to see robust growth all around.
"I do expect that we will see growth in 2017, but we have a lot of catching up to do," Webster said. "The increase is really important and long overdue and will help people."