Rising minimum wages are a big challenge for the restaurant industry in blue states.

Minimum wage hikes began in 21 states in January, and experts say rising labor costs will make it harder for some restaurants to keep their doors open.

At the beginning of the month, some 65 cities across the country had raised wages. Cities in Colorado, Washington and California have some of the highest minimum wages in the US.

According to the Economic Policy Institute, Tukwila, Washington had the highest minimum wage for non-workers at $21.10 in January. Some of the cities with the highest minimum wages this year are Seattle at $20.76; West Hollywood, California, at $19.65; Denver at $18.81; and San Francisco at $18.67.

Jot Condy, CEO of the California Restaurant Association, said the steep cost increases are unsustainable for many restaurants.

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“It’s no coincidence that restaurants in cities where you see these very high minimum wages are struggling to survive, and the rate of restaurant closings in those cities is much higher than, you know, the rate of closings in other parts of the state.”

Restaurants have low pre-tax profit margins, some between 3% and 5%, leaving little room for error, Condy said..

Food and labor costs are the biggest costs for restaurants, each accounting for roughly 33 cents of the dollar in sales, according to the National Restaurant Association.

Some Denver restaurant owners are still figuring out how to balance their budgets to keep customers coming in and their employees happy.

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Joshua Miller is an employee at Sarpino’s Pizzeria in Westminster, a northwest suburb of Denver. Miller said he started out delivering pizza and enjoyed his skills in the kitchen. He said making more than the minimum wage would help him make ends meet due to the high cost of living.

“The minimum wage helps with my rent. Gas prices.” Miller said.

Samar Sawaged owns a Sarpino’s franchise, and says she pays all her employees above minimum wage. Sawaged said many businesses like hers are paying more than the minimum wage.

“Our biggest challenge here is other pizza places,” she said. “People are fighting for more and more hourly wages.”

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Sawaged said she will find more ways to help her employees fund bonus opportunities.

Chi Lee owns Chi Express, a Chinese restaurant in Denver. Lee said the restaurant has fewer than 10 employees, which helps it balance its budget.

“Because as you can see, we have a smaller operation, a smaller menu,” Lee said, “so our food costs are a little bit lower.”

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Lee said the joint has adjusted to inflation by increasing its food prices.

It takes about 12 employees to generate $1 million in sales at a restaurant, but only about four employees at a clothing store to generate the same amount, according to the National Restaurant Industry Association.