Minimum wage increase unlikely to boost pay for many Durangoans

Wednesday, Jan. 3, 2018 10:39 AM
Brandon Shirley and Chris Block, co-owners of Three Peaks Deli and Grill, 2411 Main Ave., said they won’t be affected by the increase in the minimum wage to $10.20 an hour, which went into effect New Year’s Day. And when the minimum wage rises again next year, they will look at other options before resorting to price increases.

The minimum wage in Colorado increased from $9.30 to $10.20 an hour on New Year’s Day, but it is unlikely to change pay for many employees in Durango, where the entry-level wage for a job is higher than $10.20.

However, when the minimum wage rises to $12 an hour in 2020, it’s unclear if the increase will boost pay for entry-level employees in Durango or cause business owners to look for alternatives to hiring.

“In Durango, it’s hard enough to find quality employees that if you’re paying them minimum wage, you are not going to have them for long,” said Ted Hermesman, owner of Days Inn.

Hermesman said an employee might be hired at minimum wage initially to ensure the new hire has the proper work ethic, but within a week, if the employee shows basic work competency, he or she will receive a raise.

“If you hire a high school kid, and he makes a difference for you, if the kid is good at his job, supply and demand is going to take over, and he will not be making minimum wage for long,” Hermesman said.

On Nov. 8, 2016, Colorado voters passed Amendment 70, which raised the minimum wage across Colorado by 90 cents a year until it reaches $12 an hour in 2020. The measure passed 55 percent to 45 percent.

Rocky Moss, manager of the Cortez Area Chamber of Commerce and the Dolores Chamber of Commerce, said the minimum wage increase might have more of an impact in rural Southwest Colorado and in towns outside of Durango.

“It’s going to cost you incrementally,” she said. “If you have a payroll, and you have 120 hours a week, you can do the math. Yeah, I think it’s going to have an impact.”

Moss said the increase in the minimum wage could also force increases in pay up the wage-scale ladder, causing additional payroll costs.

The McDonald’s in Cortez, she said, has added two kiosks for customers to self-order. “Who knows if more of that will start to happen.”

The chambers of commerce in Cortez and Dolores want to conduct a study of the minimum wage increase in the two communities, she said, and would like to hear from businesses about the impact of the rate increase.

She added that a $12 minimum wage might not harm job creation on the economically vibrant Front Range, but it could dampen job creation in rural Colorado.

“We don’t have the resources you have in a large municipality,” she said.

Chris Block, co-owner of Three Peaks Deli & Grill, 2411 Main Ave., said all his employees currently make more than $10.20 an hour.

However, in 2019, when the minimum wage goes up to $11.10 an hour the business might need to make adjustments.

Next year, Block said, the business might have to use more formal accounting methods to ensure tips are keeping wages above the minimum wage.

Block said a more formal accounting of tips would be his first step before looking to increase prices.

Shane Lugo, district manager for Wendy’s, said wages at the store increased last month, and prices were increased three months ago.

Future annual price adjustments would likely take into account the cost of wage increases.

Ultimately, Hermesman said, it is job-holders themselves who need to look at their own skill sets, aptitudes and work ethics in seeking wage increases beyond the minimum wage.

“People need to be responsible for themselves and quit having the government do everything for them,” he said.

This story has been corrected to show that employees at Three Peaks Deli and Grill make more than regular minimum wage hourly rate, not the tipped-wage minimum