(You can listen to this column, read by the author, here.)
The bad policy chickens are coming home to roost.
At least you can eat chickens.
We are seeing the first domino tumble in the economic ruin that will hit all of Colorado in a few short years. Small businesses, like locally owned restaurants, are shuttering.
I don’t know if you remember dining out in Colorado before it became unaffordable, but I’m old enough to remember it, and if memory serves, it was awesome. I can’t wait to tell my grand kids about it someday.
A family shouldn’t have to get a Small Business Administration loan just to eat out. But even with the outrageous price hikes on Colorado menus, restaurant owners still can’t pay the bills. Recently three well-known Denver restaurants were forced to close.
The owner of Three Saints Revival blamed, “The staggeringly low office buildings’ occupancy … combined with economic and other forces, had made it impossible to stay in business.”
The owners of Ana’s Norwegian Bakeri on the 16th Street Mall criticized “slow pedestrian traffic” for their downfall.
Funny how increased violence, litter and homelessness discourages customers from frequenting crime-infested streets.
And the owner of the boarded-up Avelina on 17th Street was blunt: “The minimum-wage increases have been unbearable.”
He gave a flawless economics lesson about the real-life impacts of price controls. “These policies only end up with the population all experiencing a lower quality of life. No one has figured out that the only winner in the raise-the-minimum-wage game is the government. They make more — minimum-wage earners make more — but then are faced with everything becoming more expensive. They don’t get ahead. Only the (government) gets a raise. I think it’s silly that wealthy libs don’t get that.”
Now his workers are making no wage at all. Mission accomplished.
About a complaint he got regarding a canceled reservation, the now-broke owner said, “We paid to keep the place open for the last two years — we are now closed for good. So, no, we aren’t booked. We lost our asses and are now done. All you idiots running this town can do is raise the minimum wage running small business owners out of business. Cry me a river about your dinner reservations.”
Denver’s minimum wage is an eye-popping $18.29 an hour (less for tipped employees). A few years ago the state legislature and Gov. Jared Polis, citing “local control,” allowed localities to increase their minimum wages but, of course, not decrease it. It’s just a one-way ratchet to bankruptcy. But it sure does feel good.
Beyond the minimum wage, small businesses need to pay a new payroll tax of nearly 1%, split between employer and employee, for the new FAMLI leave act. And it forces even more costs on employers to train and hire temporary workers to fill in.
Now they can stay on leave permanently, without pay.
No person risks all they have on a small business to spend their limited time and resources on government mandates and paperwork. They need to be building their business instead.
Restaurants, especially Colorado restaurants, are the first to take it on the chin.
While the nation’s inflation rate is 3.1%, according to the Bureau of Labor Statistics, Colorado’s inflation rate for eating out is more than double at 6.7%.
What drives cost at restaurants beyond labor? Energy is a big one. While Colorado’s war on energy is hitting us all in the pocketbook, restaurant owners get it worse with industrial appliances, gas stoves, walk-in refrigerators and the like.
While nationally the cost of “energy services” according to the Bureau of Labor Statistics has dropped by 2% in the last year, it’s gone up more than 10% in Colorado. And that cost is shown in everything we buy here, including your next hamburger.
Read this again! Nationally, energy services are down 2%, but they’re up 10.3% in a state with some of the country’s greatest reserves of coal and natural gas. This is a policy-driven, Colorado-specific hyperinflation.
And it’s just starting.
I’ve mentioned before a great Colorado rebound is nearing. Fiscal sanity must return to Colorado, mind you, I think it’s still six to 10 years away. And it will only happen after more economic devastation — caused by the left’s control of all political levers — rips through Colorado.
But it’s going to get a lot worse before it gets a little better.
Jon Caldara is president of the Independence Institute, a free market think tank in Denver.
