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- A Decent Minimum Wage is the Root of All Evil
It’s pretty typical of Matt Yglesias to have a anti-worker post on his blog, written by an intern or underpaid employee, on Labor Day. The gist of it is that Denver restaurants are failing for a number of reasons, but a big one is the minimum wage in Denver:
Perhaps no city better exemplifies the challenges facing the restaurant industry than Denver, where some of the highest prices in the country — for both operators and customers — are making it nearly impossible for businesses in the midsize city to stay open.
While intended to support workers, Denver’s high minimum wage, especially its low tip credit, has unintentionally undermined the financial viability of full-service, labor-intensive restaurants. As costs outpace revenue and margins evaporate, once-thriving independent establishments are closing in droves, eroding the city’s cultural fabric and economic diversity.
Of course, the data given is anecdata, and the people interviewed are restaurant owners.
The piece also discusses the other reasons that Denver restaurants are failing, among them high rent for retail space and high prices.
Let me ask one question: How the fuck are restaurants going to have good service workers, especially in an expensive place, if they don’t pay them a decent wage?
My kid moved to Denver from Rochester a couple of years ago, and one of the things that I heard immediately was that the food was better in Rochester. Rochester has an excellent restaurant culture. Even though the cost of living in Rochester has gotten a lot more expensive in the last few years, it manages to have some high quality restaurants. I’m talking about places where dinner and drinks for two is around $100.
I’ve eaten out quite a bit in Denver. To get the equivalent of a $100 or so Rochester dining experience (for two) in Denver, you’re looking at $150, and it’s often not as good as it would be in Rochester. I don’t know why this is, but I’ll guar-an-damn-tee that it’s not because the waitstaff is being paid an (almost) living wage.
I can’t say that I’m an expert in Denver’s economy, but what I see is this:
Housing is incredibly expensive, driven by an influx of new residents from states like California and Texas. This leads to house-poor residents without a lot of disposable income for dining out, which is a luxury.
Wages have not risen to meet the cost of living. I’m too lazy to look it up, but the last numbers I saw were pretty damn low compared to the cost of living.
There’s a lot of new development, and the retail space in that development (i.e., where restaurants would be located) is high rent.
Traffic is terrible, so perhaps people are using DoorDash instead of going out.
One thing that I didn’t see in that piece was a “shortage of workers”. Perhaps paying a decent wage leads to Denver having a pool of workers who can live in the city and come to work. But the Matt Yglesias of the world just want the proles to labor for nothing. Fuck that guy.
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