Why City Council Needs More Information Before Adjusting Tipped Wages
Boulder's City Council will discuss possible changes to the city’s tipped minimum wage at its April 2 meeting. The meeting memo outlines several options but also highlights major data gaps.
Background
Boulder adopted its local minimum wage in 2024 after three years of analysis and engagement. City Council recommended revisiting the ordinance after observing its impacts on restaurants and workers. Because economic data lag by at least a year, Councilmembers won't know the effects of the 2025 increase until later this year; data for the 2026 and 2027 increases will take years to arrive.
This year, a narrow majority of Councilmembers asked staff to reconsider the 2024 ordinance following concerns from restaurants about rising labor costs. At the January 2026 retreat, staff clarified they could not match the original, comprehensive analysis in just one year. The April 2 memo outlining options for changing the city’s tipped minimum wage reflects these constraints.
Councilmembers will review options at their April 2 meeting. Instead of deciding now whether to pause, slow, or decrease tipped wages, they could ask staff to 1) fill data gaps about the 2024 ordinance’s impacts and 2) consider other policy changes to support independent restaurants with rent, utilities, and supply costs. Councilmembers could then consider changes to the tipped wage in 2027.
Data Gaps: What We Still Don’t Know
1. What independent analysts say about impacts of local minimum wage increases
The memo relies heavily on industry‑aligned reports that draw from the Colorado Restaurant Association and the National Restaurant Association (both political advocacy organizations). Independent analyses, such as the Colorado Center on Law and Policy’s 2025 issue brief, were not included even though they use gold-standard federal and state datasets and reach very different conclusions about Denver restaurant stability, job loss, and long‑term trends.
2. How restaurants compare to the rest of Boulder’s economy
There is a clear decline in the city's restaurant sales tax revenue since 2019, but the memo lacks parallel data for other industries. Many sectors experienced declines due to the pandemic, inflation, and shifting consumer behavior. Without citywide comparisons across industries, it's impossible to tell whether sales tax revenue from restaurants is uniquely declining or simply moving with broader economic patterns.
3. What’s driving restaurant cost increases
Increasing labor costs are just part of the picture. The memo lacked data on increasing rents, food and supply costs, insurance, utilities, and the effects of power outages. Without this, Councilmembers can’t determine which tools best aid the city’s independent restaurants.
4. How digital tipping is expanding the tipped‑worker universe
Digital payment systems now prompt tipping in places where it was rare, from farmers’ markets to dry cleaners. As more sectors normalize tipping, more businesses may classify workers as “tipped employees”. Any change to Boulder’s tipped wage rules could affect a growing number of employees, but the current and future impacts are unclear without understanding the impacts of digital tipping.
5. How wage changes affect the city’s budget and safety net systems
Lower‑wage workers spend nearly all their income on taxable goods and services, supporting Boulder’s sales tax revenue. Slowing wage growth could reduce this revenue and increase reliance on SNAP, Medicaid, rental assistance, and food banks at a time when public programs are already strained.
6. Who is most affected
People of color and women are overrepresented in Boulder County’s restaurant industry, but the city lacks local demographic data. Without it, Councilmembers don’t know who would be most affected by slower wage growth or greater reliance on tips. Wage theft likewise disproportionately impacts women, immigrants, and workers of color; a 2024 Rutgers analysis found 12-16% of Denver area restaurant workers experienced wage theft.
7. What this means for community trust
The 2024 ordinance was adopted after years of analysis and engagement. Changing it now, without updated analysis or the promised impact data, risks undermining community trust in Boulder’s commitment to a data‑driven, equity‑focused process.
Why the city needs more information before making changes
Independent restaurants and low‑wage workers are both essential to Boulder, historically and today. Both struggle in this tough economic environment and deserve a decision‑making process that includes a portion of the careful analysis Councilmembers used when establishing the local minimum wage.
As the City Council considers its next steps, remember that the city often extends timelines to better align with its decision-making frameworks and values, especially when critical data are lacking. Whether you agree with my position or not, you can email the City Council or sign up to speak at the April 2 Open Comment by 2 pm on Wednesday (April 1) to share your thoughts. Participation matters, as engagement on this topic will be very minimal relative to the 2024 ordinance’s adoption.
