Niwot and Hygiene businesses struggle with rising costs

Strong headwinds are blowing against the success of small businesses in unincorporated Boulder County, including Niwot. In the last year, small businesses have incurred losses due to a power shutdown and significant increases in sanitation fees, property taxes, food costs, and insurance.

Small businesses now face the impact of the recent Boulder County minimum wage increase, with Niwot, Hygiene, and other businesses in unincorporated Boulder County required to pay a minimum wage of $15.69 per hour in 2024. The $15.69 per hour is 15% above Colorado's 2023 minimum hourly wage of $13.65 and $1.27 higher than surrounding incorporated towns and cities, which have not elected to go above the minimum hourly wage of $14.42 set by state statute.

While Colorado law now allows local governments, including county commissioners, city councils and town boards to set a minimum wage higher than that set by state law, only Boulder County has done so among local governments.

While paying a minimum wage that is currently 8.8% higher than neighboring communities may be a manageable expense, the ordinance adopted by Boulder County also calls for the minimum wage to increase yearly, reaching $25 per hour by 2030, and thereafter increasing based upon the Consumer Price Index.

Stacy Szydlek and Tara Shaheen, co-owners of the Niwot Tavern, Alison and Seth Steele, co-owners of Niwot Market, Steve Gaibler, owner of Garden Gate Cafe, and Carrie Olson, owner of Mountain Fountain in Hygiene, are all concerned.

Szydlek and Shaheen work diligently to provide an exceptional atmosphere with top-notch food, service, and food safety. Recently, they temporarily closed their restaurant to send all their employees to a ServSafe certification program managed by Boulder County. This certification is essential, as a restaurant cannot operate without at least one certified staff member. Despite inflation affecting the cost of goods, they strive to avoid raising prices but are deeply concerned about the impending minimum wage changes.

Shaheen said, "With the minimum wage at $25 per hour, we will have to increase what we pay our lead employees, but we will not be able to do this without increasing our prices. Increasing the wages for the more experienced and skilled employees will result in localized inflation."

Shaheen elaborated, "Payroll could increase by 27 percent, then we may have to consider a new business model. If this were to happen, the new business model could shift to a self-serve operation, eliminating the wait staff and having only one person managing the front of the house.

Szydlek said, "I have been in this industry since I was 12. This is about your relationships and providing a good atmosphere and food." Szydlek and Shaheen explained, "We are almost the last standing real restaurant where you can go out and enjoy a great dinner. We are providing the community with a gathering place and employment."

Around the corner from the Niwot Tavern, Alison Steele, co-owner of Niwot Market, has similar concerns. She emailed the commissioners and participated in some Boulder County outreach, including a meeting with Commissioner Marta Loachamin. She explained, "We are a little store, and the commissioners are telling small businesses how and when to give pay raises. So, when labor costs increase, prices must be raised." Steele added, "Next year, we may avoid hiring high school or college-age kids because they lack experience. If you pay someone $25 to check groceries, what will you pay the butcher? You cannot keep raising prices because, at some point, people cannot afford it."

Steele elaborated, "Perhaps we should hire fewer people and avoid hiring first-time employees with little experience. This year wasn't too bad, but the future looks scary." Steele concluded, "People said we should raise our prices, but we want to wait."

West of Niwot Market is the long-standing Garden Gate Cafe, owned by Steve Gaibler. This is Gaibler's 24th year, and the business has grown throughout the years, except during the pandemic. The industry averages a retention rate of nine months, and he has several long-term employees ranging from 11 to 14 years. Gaibler said, "I have not had a minimum wage employee in 10 or 12 years, and what is frustrating is the current minimum wage ordinance will not allow me to reward people for hard work. When the commissioners mandate it, my hands become tied. We will do this entire procession, and instead of a $10 hamburger, we will have a $25 hamburger."

Gaibler has also considered changing his future business model, which could include increasing prices, cutting jobs, or having people order food at a specific station and bring it out to them. He commented, "Some individuals are excited about $25 per hour but are unaware of the ancillary effects and impacts that could ultimately impact them - cutting hours, jobs, and automation."

Gaibler observed, "Government should not be telling the owners what to do. The minimum wage was designed as a threshold, an entry wage. The mandate is coming from the top, but the solution should come from the bottom, small business."

Not far from Niwot, in Hygiene, Colorado, is Mountain Fountain, a country store and deli where the historic Clark's food store once operated. Mountain Fountain offers a variety of products, including soups, chilis, sandwiches, locally pastured meats, natural sodas, teas, kombucha tea, coffee, and gifts.

Carrie Olson, owner of Mountain Fountain, found out about the upcoming ordinance and wrote to the commissioners. She asked, "If she is required to pay $25 per hour to unskilled and inexperienced laborers, what she will have to pay her manager and butcher?" She also said she may have to consider changing her business model in the next five years. She believes in a living wage but said, "It needs to be realistic, and if not, it will lead to localized inflation."

Olson champions small businesses, with approximately 90% of her inventory sourced from local small enterprises. She procures meat and various other products from the Buckner Family Farm. This approach creates a positive ripple effect, benefiting other small businesses in the community. However, this ripple effect can turn negative if small businesses start closing due to increased costs.

Unless nearby communities raise their local minimum wages to match Boulder County's minimum wage, Niwot and Hygiene businesses will have higher labor costs than similar businesses in Boulder, Gunbarrel, Lafayette, Longmont, Louisville, and Lyons. With no shortage of business challenges and increased costs experienced by local businesses, Boulder County's minimum wage legislation has added another concern to Niwot and Hygiene businesses, which, according to the small-business owners, could lead to fewer jobs in the long run.