At the end of July, Boulder County announced that it plans to increase the minimum wage in unincorporated portions of the county by 15% on Jan. 1. The announcement has businesses and chambers of commerce concerned about the impacts that could result from the increase.
One Longmont business owner — who asked to remain anonymous so as to not represent every voice in Longmont’s business community and whom we will call Jane for the sake of clarity — said her position on minimum wage was torn. On one hand, her children were struggling to find affordable housing on minimum wage salaries so she understands the need. On the other hand, she said her business — a restaurant — would suffer if wages were increased suddenly.
“I get it. The cost of living is really high here and it’s difficult, especially for young people, unless you have already been established and own a home. So, if this is the way the cost of living is going to be, I think people need to make more money in order to be able to survive here. I’ve even contemplated if I will even be able to retire here,” she said.
According to the Boulder County Living Wage Coalition, the current minimum wage of $13.65 only covers 60% of the true cost of living in Boulder County. The coalition cited a recent poll that stated most voters believe individuals need to make at least $26 per hour to make ends meet.
“As the cost of living continues to grow, Boulder County’s current minimum wage has failed to keep up with the demands of essentials like housing, childcare and food,” the coalition stated in a presentation earlier this month.
Jane’s biggest concern is implementing a higher minimum wage quickly and not being ready for it. If the increase came on suddenly she said, “people would probably have to lose their jobs. I would have to change our concept in the way that we run. I would not be able to afford to have as many people on the clock. I would have to find a little bit more of an automated service model.”
Jane saw similar problems with the last minimum wage increase. She said she had to cut back on staffing. Her restaurant had to adapt from having a full management team to having service staff pick up the slack.
Each decision Jane makes has a consequence she said and it is a matter of choosing which one to adopt. An option she has considered is moving away from scratch recipes to pre-made foods. However, she feels this would impact her business in a negative way, further hurting the wages and employment of the staff.
A study was conducted in Minneapolis and St. Paul that looked at the impacts minimum wage had on the two cities. An article in the StarTribune, summed up the study and found that while wages did increase, the hours worked and the number of jobs decreased especially in the food service industry. The study found that “overall hours, jobs and earnings declined by between 0.5% and 2.3% in the two cities.” In some cases hours and jobs declined by more than 20%.
Michael Reich, an economics professor at the University of California, Berkeley who has studied minimum wages, was skeptical of the study because it was conducted around the same time as the COVID-19 pandemic.
"But their effects are just way out of line with what anyone else has found," he said of the Minneapolis Fed studies. "I think including the pandemic year is a big elephant in the room. It's very hard for them to control for the pandemic."
The Northwest Chamber Alliance, which consists of executives, managers and staff with the Boulder Chamber, Boulder County Latino Chamber of Commerce, Lafayette Chamber of Commerce, Longmont Chamber of Commerce, Louisville Chamber of Commerce and Superior Chamber of Commerce, released a business survey to the community to understand business concerns. The survey closed at the end of August and results were not available upon publication.
However, an email sent from the alliance on Aug. 28 said more than 400 Boulder County businesses had responded with two-thirds of them “telling us that a rush to increase the minimum wage would hurt their business and employees.”
Scott Cook, executive director of the Longmont Chamber of Commerce, said small local businesses struggle to adapt to changes because they don’t always have the funds or the wherewithal to weather the changes. Larger businesses may have resources to support it from outside the community.
“A locally owned business just has this community to support them,” Cook said.
Cook was unable to provide results from the survey during the interview stating that the final results would be available at the Oct. 12 town hall with the Boulder County Commissioners.
The Northwest Chamber Alliance does not hold a position on whether or not to increase the minimum wage, Cook said. “What we do have a position on is we are opposed to Boulder County on their own, outside the consortium, outside of city of Longmont, outside of city of Boulder, going out on their own saying ‘we are going to implement a minimum wage increase for Jan. 1, 2024.”
“The alliance has always intended for us to do this all together (including the chambers) … we might not always agree to a minimum wage but we would always be part of the conversation,” Cook said.
The original timeline to increase the minimum wage included a hike in 2025. The decision from the Boulder County Commissioners to move that timeline up to 2024 came as a surprise.
Moving the increase up to 2024, “we feel that the work that we have done to serve our members, the conversations with our members, that’s all for not because you (the county commissioners) are just going to go ahead and do it anyway,” Cook said.
During the pandemic, retaining employees became a concern for local businesses to the point that many of them increased hourly wages well above the current minimum wage and in some cases the proposed minimum wage of $15.69 per hour.
Although Cook understands the position that this increase may not impact all businesses because of their choice to increase wages in the near future, he said another 15% increase is expected the following year and into the future.
“I think that is where businesses start getting concerned,” he said. “We need to also think carefully about what kind of character we want in our community. We have a real love in this community for a local business, for an immigrant that wants to start a business, a restaurant or something and we love supporting them. That’s just who we are.”