Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The state of Colorado's restaurants. She is the Are you
the executive director of the president the CEO?
Speaker 2 (00:05):
Sonia Riggs President and CEO President and CEO.
Speaker 1 (00:08):
Of the Colorado Restaurant Association. First of all, welcome to
the show.
Speaker 3 (00:12):
Thank you for having me.
Speaker 1 (00:13):
So tell me a little bit about the Colorado Restaurant Association.
Speaker 2 (00:15):
First, what do you guys do.
Speaker 4 (00:17):
We're a trade association, which means that restaurants themselves, the owners,
are members of our organization and we do anything from lobbying.
Speaker 3 (00:26):
At the state and local government for them.
Speaker 4 (00:28):
We offer a lot of compliance support because laws are
changing so often and they're very busy and need a
lot of help on updates. We do educational programming for them.
We offer discounts on products and services that they need.
We also offer employee development and training, an apprenticeship program
through our foundation, and offer emergency assistance grounds to employees
(00:51):
that have unexpected hardships like an injury or major surgery
that they have to do.
Speaker 3 (00:56):
So we try to just really support restaurants however we can.
Speaker 2 (01:00):
That's excellent.
Speaker 1 (01:00):
So let's talk about restaurants in Denver because and I'm
focusing in on Denver specifically, for one reason, their minimum
wage is about to go over nineteen dollars an hour.
Speaker 2 (01:10):
And we've seen in the.
Speaker 1 (01:12):
Last few weeks some long time Denver staples, whether it's
the pub in wash Park or whether it's some of
these other longtime restaurants just packing it up and saying
we're going to go ahead and close our doors now.
So what are you hearing from your membership about the
business climate, what it's like to do business in Denver
(01:33):
right now?
Speaker 4 (01:35):
Well, it's hard and it's really sad to see what's
going on with restaurants. I have restaurants that will call
me crying literally, not knowing if they're going to be
able to keep their doors open.
Speaker 3 (01:45):
And it happens more than you think.
Speaker 4 (01:47):
Sadly, Denver in particular is more difficult because the minimum
wage is four dollars an hour higher than the rest
of the states. And we can talk about that more
in a minute, but over all, it's getting harder and
harder for restaurants to survive. And just to put this
in context, in a good in good times, the average
(02:08):
profit margin for a restaurant is between three and five percent.
What I'm hearing now from more and more operators is
they're lucky if they're even making one to two percent profit,
so that's any out of every dollar. Some are not
making money at all. I've heard from restaurants, especially in Denver,
that the only reason that they're still open is because
it costs more money with the least that they have
to close. And it what if they're just huddling along
(02:30):
and limping along and staying open. But people are eating
out less because costs are going up, and they're also
drinking less, which is, you know, a new trend that
we're continuing to see, but that's where restaurants make their
bread and butter a lot.
Speaker 3 (02:43):
Of the time.
Speaker 4 (02:44):
So it's just it's it's and then add you know,
additional laws, add labor costs and all of these other things.
It's literally like death by a thousand cuts. They are
just really having a.
Speaker 2 (02:54):
Hard time right now, Sonya.
Speaker 1 (02:55):
One of the things that I hear when I talk
about the minimum wage and specifically how it restaurants because
restaurants traditionally, and I worked in restaurants from the time
I was seventeen.
Speaker 2 (03:07):
Through my first four years of radio.
Speaker 1 (03:09):
Because I was making so much money in radio, I
had to supplement my income as a bartender and a server.
I've done everything in the front of the house of
a restaurant. I've managed restaurant, bartended, I've literally done everything.
I've never cooked. I have washed dishes, i have prep cooked,
but I've never cooked.
Speaker 2 (03:24):
It is a hard job.
Speaker 1 (03:25):
But back in the day, I made two dollars and
one cent an hour in Florida as a tipped employee.
But there was not a single day that I did
not blow past minimum wage.
Speaker 2 (03:36):
Where I was.
Speaker 1 (03:37):
Minimum wage at the time was like seven thirty five
or something. Now five thirteen, it was five thirteen. I'm
making fifteen twenty bucks an hour waiting tables. That's why
I waited tables, because I had some kind of control
over it. And yet you have people that say, Nope,
the minimum wage should apply for tipped employees. It's not
as high as the other minimum wage, but it is
(03:59):
still way higher than I think.
Speaker 2 (04:01):
It needs to be.
Speaker 1 (04:02):
How does the Colorado Restaurant Association address those concerns that
somehow tipped employees shouldn't be left behind.
Speaker 4 (04:10):
Well, I think that's one of the things that we
constantly try to educate people on because there are people
that are opposed to what we're doing that say that
that tipped workers are making sub standard wages, which.
Speaker 3 (04:21):
Is actually illegal.
Speaker 4 (04:22):
Nobody will to get paid less than the full minimum wage.
Speaker 3 (04:25):
You cannot take home less than that.
Speaker 4 (04:27):
In reality, there's something called a tip credit which allows
restaurants to pay their tipped you know, their servers and
their bartenders. They're folks that are traditionally tipped three dollars
and two cents an hour, less than the full minimum wage,
but on average, and we just did a survey a
couple months ago, and we found out that those front
of house employees, like the service and the bartenders, on average,
(04:48):
now earn about thirty nine to forty two dollars an hour.
Is those backup house workers like the cooks and the
dishwashers that are making twenty to twenty five dollars an hour.
Speaker 3 (04:57):
So what happens every time there's a.
Speaker 4 (05:00):
Forced minimum wage increases, that wage disparity, that gap between
the front of the house and the back of the
house continues to go up because what's happening is servers
are actually making a double Those folks are actually getting
a double raise every year, which, don't get me wrong,
it's I love that they're getting more money, which is wonderful.
The problem is it's making that gap bigger and bigger,
(05:23):
and those poor folks that are the ones that are
creating these great meals for us.
Speaker 3 (05:27):
Are getting left further and further behind.
Speaker 4 (05:29):
And the problem is, with those tiny profit margins, restaurants
have no choice right but to make changes, and we
see that in a variety of ways. We actually did
a survey a couple months ago, like I said, and
ninety two percent of restaurants said they're going to increase
their menu prices. This happens every time minimum wage goes up.
Sixty eight to seventy percent say they're going to reduce
(05:51):
their staffing levels or reduce their hours, so they're they're
literally cutting staff. Some people twenty percent or so are
implementing service charges now, so they're changing the way that
they pay people, and they're forcing you to pay right
a service charge rather.
Speaker 3 (06:05):
Than you choose how much you want to eat tip.
Speaker 4 (06:07):
They're reducing their hours of operation or they're closing, so again,
jobs are going away, and that's the sad reality of this.
Speaker 1 (06:14):
I want to make a comment about you know, in Europe,
the servers are paid what we call a living wage, right, this.
Speaker 2 (06:21):
Is the big thing.
Speaker 1 (06:22):
How could they pay their servers in Europe so much
more money. I'm going to tell you why the service
sucks a vast majority of the time. The service sucks. Okay,
not everywhere, not all the time, but I'm telling you
right now, when you go as an American to Europe,
you will immediately see the difference. When we were in Japan,
(06:42):
there's no table service anywhere, Like, nobody waited on us, right,
it was like, oh, here, put your information into this
kiosk and then come back and get your food.
Speaker 2 (06:51):
So what we do in the United.
Speaker 1 (06:53):
States, the level of service that is provided by servers
is so different, and tipping makes a big part of that.
Speaker 2 (07:00):
Right. You can see it so clearly.
Speaker 1 (07:02):
In Europe when they don't care if you get if
they get your meal right, they don't care because they're
making the same amount of money as they were if
you weren't.
Speaker 2 (07:09):
They don't care.
Speaker 1 (07:10):
If you wait for forty five minutes to get anything,
they don't care. And it shows so for people who
want to adopt that model, you better get ready for
a shock to the system culture wise that I don't
think you'd appreciate.
Speaker 4 (07:23):
Go ahead, well, well, we're already starting to see that.
We're seeing more computers used. You know, people are checking out.
Look at even at the grocery store, right, there's so
many self service kiosks and the lane there's usually a
lot of times the lanes aren't even open. But you're
seeing that happen in restaurants where even chef driven restaurants
are moving to counter service more because of fewer staff.
(07:44):
So so to your point, right, they literally the way
any restaurant works anywhere in the world is you have
a certain number of costs and only so much people
will pay for a meal, so you have to be
really creative about what you do with that and the
hire that labor goes up or the people they can
afford to have. It's it's just a fact because remember
(08:04):
restaurateurs have to make a living and pay their family
that you know, they have to bring an income. They
don't just weren't just made of money, so they have
to actually support their own families as well, and they're
doing the best they can, but it's real challenge.
Speaker 1 (08:15):
So I want to ask one last question before we
have to wrap up, and that is this, have you
guys ever compared restaurant prices in Denver, specifically to other
places in the country, because what I think has happened
here is that we don't realize if you don't travel.
We travel extensively. We travel all over the place. I
tell people all the time, when I went to Switzerland,
Switzerland's one of the most expensive places to go. I
(08:37):
didn't pay more for a meal in Switzerland than I
pay when I go to Denver, and many times.
Speaker 2 (08:42):
It was lower.
Speaker 1 (08:43):
So we have these exorbitant prices, and yet people it's
like we slowly boiled the frog.
Speaker 2 (08:48):
They don't realize how higher our prices are.
Speaker 1 (08:51):
And it's it's not because the chefs are getting rich, right,
It's because that's what it takes to stay in business.
Speaker 2 (08:55):
Have you guys ever done that apples to apples comparison?
Speaker 3 (08:58):
Have it on the prices.
Speaker 4 (08:59):
But let me tell you this is going to make
sense to you when I tell you this. So as
we know, the full minimum wage in Denver is going
up to nineteen twenty nine an hour on January first,
the tipped wage is going to go up to sixteen
twenty seven. In New York City, the full minimum wage
is sixteen dollars and fifty cents an hour in San
Francisco is nineteen dollars and eighteen cents in Los Angeles's
(09:20):
seventeen eighty seven. I say that because these those cities
are known to be extremely expensive and their wages are lower.
There's a reason that our prices are going up so
fast and that are comparable to some of these really
expensive cities.
Speaker 3 (09:36):
It's because of things like.
Speaker 4 (09:37):
This, and labor used to be about thirty percent of
a restaurant's expenses. Now I'm hearing from operators it's more
than fifty percent on hour. It's gotten that much more expensive,
So that's why you're.
Speaker 3 (09:49):
Seeing those increased prices.
Speaker 1 (09:51):
Well, Sonia, let's check in after the next minimum wage
increase goes in and see what happens then. I mean,
all of these well intentioned policies are just that well intentioned,
but they're hurting people who are the job creators, and
at some point you just have to decide it's not
worth it. And that's kind of what I've talked to
a few chefs who have closed their restaurants, and that's
(10:12):
where they reached it was just not worth it to
do it anymore. It's too hard to do it for
no money. Sonya Riggs, the executive director and president of
the Colorado Restaurant Association.
Speaker 2 (10:21):
Thank you for your time today, Thank you for having
me
The state of Colorado's restaurants. She is the Are you
the executive director of the president the CEO?
Speaker 2 (00:05):
Sonia Riggs President and CEO President and CEO.
Speaker 1 (00:08):
Of the Colorado Restaurant Association. First of all, welcome to
the show.
Speaker 3 (00:12):
Thank you for having me.
Speaker 1 (00:13):
So tell me a little bit about the Colorado Restaurant Association.
Speaker 2 (00:15):
First, what do you guys do.
Speaker 4 (00:17):
We're a trade association, which means that restaurants themselves, the owners,
are members of our organization and we do anything from lobbying.
Speaker 3 (00:26):
At the state and local government for them.
Speaker 4 (00:28):
We offer a lot of compliance support because laws are
changing so often and they're very busy and need a
lot of help on updates. We do educational programming for them.
We offer discounts on products and services that they need.
We also offer employee development and training, an apprenticeship program
through our foundation, and offer emergency assistance grounds to employees
(00:51):
that have unexpected hardships like an injury or major surgery
that they have to do.
Speaker 3 (00:56):
So we try to just really support restaurants however we can.
Speaker 2 (01:00):
That's excellent.
Speaker 1 (01:00):
So let's talk about restaurants in Denver because and I'm
focusing in on Denver specifically, for one reason, their minimum
wage is about to go over nineteen dollars an hour.
Speaker 2 (01:10):
And we've seen in the.
Speaker 1 (01:12):
Last few weeks some long time Denver staples, whether it's
the pub in wash Park or whether it's some of
these other longtime restaurants just packing it up and saying
we're going to go ahead and close our doors now.
So what are you hearing from your membership about the
business climate, what it's like to do business in Denver
(01:33):
right now?
Speaker 4 (01:35):
Well, it's hard and it's really sad to see what's
going on with restaurants. I have restaurants that will call
me crying literally, not knowing if they're going to be
able to keep their doors open.
Speaker 3 (01:45):
And it happens more than you think.
Speaker 4 (01:47):
Sadly, Denver in particular is more difficult because the minimum
wage is four dollars an hour higher than the rest
of the states. And we can talk about that more
in a minute, but over all, it's getting harder and
harder for restaurants to survive. And just to put this
in context, in a good in good times, the average
(02:08):
profit margin for a restaurant is between three and five percent.
What I'm hearing now from more and more operators is
they're lucky if they're even making one to two percent profit,
so that's any out of every dollar. Some are not
making money at all. I've heard from restaurants, especially in Denver,
that the only reason that they're still open is because
it costs more money with the least that they have
to close. And it what if they're just huddling along
(02:30):
and limping along and staying open. But people are eating
out less because costs are going up, and they're also
drinking less, which is, you know, a new trend that
we're continuing to see, but that's where restaurants make their
bread and butter a lot.
Speaker 3 (02:43):
Of the time.
Speaker 4 (02:44):
So it's just it's it's and then add you know,
additional laws, add labor costs and all of these other things.
It's literally like death by a thousand cuts. They are
just really having a.
Speaker 2 (02:54):
Hard time right now, Sonya.
Speaker 1 (02:55):
One of the things that I hear when I talk
about the minimum wage and specifically how it restaurants because
restaurants traditionally, and I worked in restaurants from the time
I was seventeen.
Speaker 2 (03:07):
Through my first four years of radio.
Speaker 1 (03:09):
Because I was making so much money in radio, I
had to supplement my income as a bartender and a server.
I've done everything in the front of the house of
a restaurant. I've managed restaurant, bartended, I've literally done everything.
I've never cooked. I have washed dishes, i have prep cooked,
but I've never cooked.
Speaker 2 (03:24):
It is a hard job.
Speaker 1 (03:25):
But back in the day, I made two dollars and
one cent an hour in Florida as a tipped employee.
But there was not a single day that I did
not blow past minimum wage.
Speaker 2 (03:36):
Where I was.
Speaker 1 (03:37):
Minimum wage at the time was like seven thirty five
or something. Now five thirteen, it was five thirteen. I'm
making fifteen twenty bucks an hour waiting tables. That's why
I waited tables, because I had some kind of control
over it. And yet you have people that say, Nope,
the minimum wage should apply for tipped employees. It's not
as high as the other minimum wage, but it is
(03:59):
still way higher than I think.
Speaker 2 (04:01):
It needs to be.
Speaker 1 (04:02):
How does the Colorado Restaurant Association address those concerns that
somehow tipped employees shouldn't be left behind.
Speaker 4 (04:10):
Well, I think that's one of the things that we
constantly try to educate people on because there are people
that are opposed to what we're doing that say that
that tipped workers are making sub standard wages, which.
Speaker 3 (04:21):
Is actually illegal.
Speaker 4 (04:22):
Nobody will to get paid less than the full minimum wage.
Speaker 3 (04:25):
You cannot take home less than that.
Speaker 4 (04:27):
In reality, there's something called a tip credit which allows
restaurants to pay their tipped you know, their servers and
their bartenders. They're folks that are traditionally tipped three dollars
and two cents an hour, less than the full minimum wage,
but on average, and we just did a survey a
couple months ago, and we found out that those front
of house employees, like the service and the bartenders, on average,
(04:48):
now earn about thirty nine to forty two dollars an hour.
Is those backup house workers like the cooks and the
dishwashers that are making twenty to twenty five dollars an hour.
Speaker 3 (04:57):
So what happens every time there's a.
Speaker 4 (05:00):
Forced minimum wage increases, that wage disparity, that gap between
the front of the house and the back of the
house continues to go up because what's happening is servers
are actually making a double Those folks are actually getting
a double raise every year, which, don't get me wrong,
it's I love that they're getting more money, which is wonderful.
The problem is it's making that gap bigger and bigger,
(05:23):
and those poor folks that are the ones that are
creating these great meals for us.
Speaker 3 (05:27):
Are getting left further and further behind.
Speaker 4 (05:29):
And the problem is, with those tiny profit margins, restaurants
have no choice right but to make changes, and we
see that in a variety of ways. We actually did
a survey a couple months ago, like I said, and
ninety two percent of restaurants said they're going to increase
their menu prices. This happens every time minimum wage goes up.
Sixty eight to seventy percent say they're going to reduce
(05:51):
their staffing levels or reduce their hours, so they're they're
literally cutting staff. Some people twenty percent or so are
implementing service charges now, so they're changing the way that
they pay people, and they're forcing you to pay right
a service charge rather.
Speaker 3 (06:05):
Than you choose how much you want to eat tip.
Speaker 4 (06:07):
They're reducing their hours of operation or they're closing, so again,
jobs are going away, and that's the sad reality of this.
Speaker 1 (06:14):
I want to make a comment about you know, in Europe,
the servers are paid what we call a living wage, right, this.
Speaker 2 (06:21):
Is the big thing.
Speaker 1 (06:22):
How could they pay their servers in Europe so much
more money. I'm going to tell you why the service
sucks a vast majority of the time. The service sucks. Okay,
not everywhere, not all the time, but I'm telling you
right now, when you go as an American to Europe,
you will immediately see the difference. When we were in Japan,
(06:42):
there's no table service anywhere, Like, nobody waited on us, right,
it was like, oh, here, put your information into this
kiosk and then come back and get your food.
Speaker 2 (06:51):
So what we do in the United.
Speaker 1 (06:53):
States, the level of service that is provided by servers
is so different, and tipping makes a big part of that.
Speaker 2 (07:00):
Right. You can see it so clearly.
Speaker 1 (07:02):
In Europe when they don't care if you get if
they get your meal right, they don't care because they're
making the same amount of money as they were if
you weren't.
Speaker 2 (07:09):
They don't care.
Speaker 1 (07:10):
If you wait for forty five minutes to get anything,
they don't care. And it shows so for people who
want to adopt that model, you better get ready for
a shock to the system culture wise that I don't
think you'd appreciate.
Speaker 4 (07:23):
Go ahead, well, well, we're already starting to see that.
We're seeing more computers used. You know, people are checking out.
Look at even at the grocery store, right, there's so
many self service kiosks and the lane there's usually a
lot of times the lanes aren't even open. But you're
seeing that happen in restaurants where even chef driven restaurants
are moving to counter service more because of fewer staff.
(07:44):
So so to your point, right, they literally the way
any restaurant works anywhere in the world is you have
a certain number of costs and only so much people
will pay for a meal, so you have to be
really creative about what you do with that and the
hire that labor goes up or the people they can
afford to have. It's it's just a fact because remember
(08:04):
restaurateurs have to make a living and pay their family
that you know, they have to bring an income. They
don't just weren't just made of money, so they have
to actually support their own families as well, and they're
doing the best they can, but it's real challenge.
Speaker 1 (08:15):
So I want to ask one last question before we
have to wrap up, and that is this, have you
guys ever compared restaurant prices in Denver, specifically to other
places in the country, because what I think has happened
here is that we don't realize if you don't travel.
We travel extensively. We travel all over the place. I
tell people all the time, when I went to Switzerland,
Switzerland's one of the most expensive places to go. I
(08:37):
didn't pay more for a meal in Switzerland than I
pay when I go to Denver, and many times.
Speaker 2 (08:42):
It was lower.
Speaker 1 (08:43):
So we have these exorbitant prices, and yet people it's
like we slowly boiled the frog.
Speaker 2 (08:48):
They don't realize how higher our prices are.
Speaker 1 (08:51):
And it's it's not because the chefs are getting rich, right,
It's because that's what it takes to stay in business.
Speaker 2 (08:55):
Have you guys ever done that apples to apples comparison?
Speaker 3 (08:58):
Have it on the prices.
Speaker 4 (08:59):
But let me tell you this is going to make
sense to you when I tell you this. So as
we know, the full minimum wage in Denver is going
up to nineteen twenty nine an hour on January first,
the tipped wage is going to go up to sixteen
twenty seven. In New York City, the full minimum wage
is sixteen dollars and fifty cents an hour in San
Francisco is nineteen dollars and eighteen cents in Los Angeles's
(09:20):
seventeen eighty seven. I say that because these those cities
are known to be extremely expensive and their wages are lower.
There's a reason that our prices are going up so
fast and that are comparable to some of these really
expensive cities.
Speaker 3 (09:36):
It's because of things like.
Speaker 4 (09:37):
This, and labor used to be about thirty percent of
a restaurant's expenses. Now I'm hearing from operators it's more
than fifty percent on hour. It's gotten that much more expensive,
So that's why you're.
Speaker 3 (09:49):
Seeing those increased prices.
Speaker 1 (09:51):
Well, Sonia, let's check in after the next minimum wage
increase goes in and see what happens then. I mean,
all of these well intentioned policies are just that well intentioned,
but they're hurting people who are the job creators, and
at some point you just have to decide it's not
worth it. And that's kind of what I've talked to
a few chefs who have closed their restaurants, and that's
(10:12):
where they reached it was just not worth it to
do it anymore. It's too hard to do it for
no money. Sonya Riggs, the executive director and president of
the Colorado Restaurant Association.
Speaker 2 (10:21):
Thank you for your time today, Thank you for having
me
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