Colorado restaurant closures soar as Denver faces labor cost crisis

Colorado's restaurant industry is facing a significant crisis, with over 200 establishments closing statewide in 2024 alone. Denver has been particularly hard hit, losing approximately 22% of its restaurants in the past three years, translating to around 425 businesses and an estimated 21,000 jobs lost. The challenges stem from various factors, including delayed permitting, rising costs for food and rent, and notably, increased labor costs.

During a recent meeting of the House Business Affairs & Labor Committee, lawmakers discussed the pressing need for legislative action to support struggling restaurants. Representative Valdez highlighted the alarming trend, noting that Denver's minimum wage of $18.81 per hour, while higher than in states like California and Oregon, has contributed to the financial strain on local eateries. The state's tip credit system, which allows restaurants to pay a lower base wage to tipped workers, has not alleviated the burden, as many owners cite it as a reason for closures.

The committee acknowledged the difficult balance between ensuring fair wages for workers and maintaining viable businesses. Representative Woodrow emphasized the importance of addressing the concerns of restaurant owners, many of whom have had to cut staff and reduce services to stay afloat. The discussion underscored the need for collaboration among stakeholders to find solutions that support both workers and the restaurant industry.

As the committee moves forward, the urgency of the situation is clear. With vacancies at an all-time high and fewer patrons dining out, the future of Denver's vibrant restaurant scene hangs in the balance. Lawmakers are committed to exploring legislative avenues to provide relief and prevent further closures, recognizing that a thriving restaurant industry is essential for the overall health of the community.