Denver, CO’s minimum wage is hurtling toward the highest in the country – and businesses most affected by the hikes, including restaurants, are paying the price. Currently, the city’s regular minimum wage sits at $18.81 per hour (with a meager $3.02 tip credit for tipped restaurant employees). Next year, the minimum wage will rise to $19.29 an hour – nearing wage requirements similar to Seattle and San Francisco.
Similar to consequences already playing out in many high-wage West Coast markets, Denver’s rapidly rising minimum wage – and tipped wage for restaurant workers – raises serious concerns for restaurants already grappling with inflation, rising costs, and post-pandemic recovery, which together threaten to push them past their limits. Federal data shows restaurants and their employees are already taking a hit.
Recent EPI analysis of government jobs data shows the state’s minimum wage requirements have already negatively impacted restaurants, causing sharper seasonal employment drops between busy summer and slower winter periods.
Adding to the strain, a 2019 law gave Colorado cities the power to set their own minimum wages. As a result, Denver has raised its local minimum wage from $11.10 to $18.81 since then, and nearly doubled its cash wage for tipped restaurant workers from $8.08 to $15.79.
EPI analysis using the most recent Bureau of Labor Statistics (BLS) quarterly employment data shows that since Denver began raising its minimum wage beyond the state rates, full-service restaurant employment in Denver County turned negative even before COVID, and hit remarkable lows last year. That amounts to roughly 4.2% employment loss from 2023 to 2024, representing nearly 900 jobs lost. Denver’s losses are rapidly outpacing losses felt by the state as a whole, nearly tripling the rate of full-service restaurant job losses statewide.
Bureau of Labor Statistics quarterly data also shows Denver is facing a rapid decline in the number of full-service restaurant establishments. In 2024, the number of restaurants had not recovered to pre-COVID levels, and declined over the previous year by roughly 7% – or 61 closed restaurants.
New Bureau of Labor Statistics estimates released this week indicate this negative trend is continuing into 2025: monthly estimates show the Denver metropolitan area restaurant employment has been on the decline for years, and year-over-year employment change has been negative every month of 2025.
The data paints a clear picture of the damaging effects of high wages at both the state and city levels. These findings translate into fewer jobs and shrinking opportunities for hourly workers. A higher minimum wage on paper means little if rising costs force restaurants to cut hours, reduce staff, or close their doors altogether.
Local news coverage has been raising alarms about the impacts of declining restaurant activity in the last several years:
- “Denver faces sharp decline in restaurants, 82% of statewide loss in last year” – CBS Colorado, January 2025
- “Denver confirms restaurant licenses have dropped 24 percent in 2 years” – Denverite, February 2025
- “Why are so many Denver restaurants going belly up or moving out of the city?” – ABC 7 Denver, March 2025
- “Denver restaurant and bar closing after 18 years” – NBC 9 Denver, July 2025
- “Several decades-old Denver restaurants are asking for help, if not closing” – Denverite, August 2025
In response to these mounting challenges, Colorado lawmakers passed a bill this past spring allowing local jurisdictions to adjust the tip credit amount, potentially allowing restaurants to count more tips toward the minimum wage requirement as relief toward rising annual wage mandates. Unfortunately, many localities, including Denver, have not yet implemented any changes.
With Denver’s minimum wage approaching $20 an hour, the stakes are only getting higher. Without city-level action, Denver risks repeating the experiences of other high-wage cities, where misguided exorbitant minimum wage policies ended up harming the very workforce they were intended to help.