Minimum wage relevant in resorts?
November 5, 2006
The Colorado Restaurant Association opposes Amendment 42 – which would boost the minimum wage in Colorado – but mountain restaurant owners have mixed opinions.
Trudy Fleming, manager of the Glenwood Canyon Brew Pub at the Hotel Denver in Glenwood Springs, thinks the amendment might be irrelevant in the mountain resort areas.
“Most of the people working here make more than minimum wage already,” Fleming said. “Even with what it’s going up to, they make more than that, except for our tipped servers, who make $2.15 an hour to start. Our hosts and dishwashers start at around $9 an hour – so I don’t know if we would have to go up from that or not.”
Other managers and business owners in Colorado’s resort region have similar attitudes.
“From what I’ve read, and from the people I’ve talked to in other restaurants, it seems the minimum wage amendment is not going to affect many people up here – if it even passes,” said Robert Simonton, owner of Columbine Cafe in Breckenridge.
Simonton starts his tipped employees at $3.13 an hour, with an increase to $5.50 after six months. Non-tipped employees, such as dishwashers or floor hosts, start at $7.50 an hour, with increases every year.
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“If they figured the amendment on a sliding scale it would work better, but the majority of businesses and restaurants up here take into account what the minimum wage is, work around it, and pay more because cost is living is higher,” Simonton said.
The mandatory annual minimum wage hike for mountain counties, adjusted for inflation, would be based on the consumer price index for Greeley, Boulder and Denver.
This connection, as well as the fact that the amendment would become part of Colorado’s state constitution, is causing some business owners and organizations to oppose Amendment 42 as a matter of both principle and practice.
The Colorado Association of Commerce and Industry, a statewide chamber of commerce organization based in Denver, publicly opposes Amendment 42 because it would become part of the state constitution with a rigid Colorado consumer price index, which doesn’t exist, said Chuck Berry, the organization’s president.
“It will be tied to the Boulder/Denver Consumer Price Index and would go up every year with no ability to adjust it to the current economic conditions. This takes it out of the hands of policy makers, with no ability for the state government to adjust it at that point,” Berry said.
The restaurant association also opposes the measure, for similar reasons, said Bob Starekow, president of organization’s Summit County chapter and owner of Silverheels at the Ore House in Frisco.
“Our objection comes from the fact that the minimum wage would be an ever-increasing economic issue in an unpredictable economy,” Starekow said. “I pay my staff in general a great deal more than minimum wage, but my worry is that regional issues in Colorado could cause havoc.”
These regional issues involve how yearly minimum wage increases would be linked to the metro region’s consumer price index. Many feel the economic dynamics of the High Country are so far removed from those of the Denver area that the same cost of living increases should not apply.
As a result, other employers must pay more than minimum wage, because of the competition for employees in resort regions, said Bill Thoennes, spokesman for the Colorado Department of Labor and Employment. The survey confirms that nearly ever worker in Garfield, Pitkin, Eagle and Summit counties makes more than minimum wage.
But the Bell Policy Center, a Denver-based non-partisan public policy think tank that promotes employment opportunities for Coloradans, favors Amendment 42. Researcher Rich Jones said the importance of raising the minimum wage outweighs other arguments.
“The minimum wage hasn’t been raised in 10 years and has lost 25 percent of its value in that time due to inflation,” Jones said. “Congress hasn’t acted on this since 1997, and neither has the state legislature.”
He believes the amendment will protect low-wage workers and keep up with the cost of living. Passage of Amendment 42 will remove the issue from the political arena, giving the growth rate some stability, he said.
“This way, it can’t just be changed on a whim due to a change in power or in the governor’s office,” he said. “We’re better off if we don’t have to have these fights every five or 10 years.”
According to figures from the Bureau of Labor Statistics, the increase would help about 138,000 Coloradans – including a large number of people in the leisure and hospitality industries. Approximately 73,000 people, or 3 percent, earn between $5.15 and $6.85, Jones said.
“We figured that another 65,000 people earn a little bit more than $6.85, and they would get an increase down the road as employers adjust the wage scale,” he said. “You’re looking at a total of 3 percent to 6 percent of people that will get a raise out of this.”
He discredits the argument that a minimum wage hike would be bad for business owners. For instance, Oregon’s minimum wage is $7.50 an hour. In 1996, it surpassed the federal level, and then in 2002 it increased and indexed to inflation as a constitutional amendment. The state is ranked eighth in the nation in job growth.
“They’ve seen growth in restaurant and retail jobs, and in other places that employ low-wage workers,” Jones added. “They’re doing just fine.”
Amendment 42 would increase the minimum wage by 33 percent for non-tipped employees, taking them from $5.15 to $6.85, with an annual increase adjusted for inflation.
Tipped employees would see a raise from $2.13 to $3.83, with annual adjustments made at the same rate as for non-tipped workers.
Hourly wages in Pitkin, Garfield, Eagle and Summit counties:
– Fast food workers: $8 to $11
– Dishwashers: $8.31 (average)
– Hotel desk clerks: $11.53 (average)
– Housekeepers: $11.09 (average)
Leisure and hospitality companies employ 35 percent of the region’s workers, according to the Job Vacancy Survey for the Northwest and Rural Resort Region of Colorado, released by the Department of Labor and Employment in February 2006.