In January, 21 states introduced minimum wage increases, and experts say rising labor costs are making it harder for some restaurants to stay open.

At the beginning of the month, salary increases were introduced in about 65 cities of the country. Cities in Colorado, Washington, and California have the highest minimum wages in the United States

Tukwila, Washington, had the highest minimum wage in January at $21.10, according to the Economic Policy Institute. Other cities with the highest minimum wages this year include Seattle at $20.76; West Hollywood, Calif., $19.65; Denver – $18.81; and $18.67 in San Francisco.

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

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“It's no coincidence that restaurants in cities where you see these super-high minimum wages are struggling to survive, and the closing rate for restaurants in those cities far exceeds, you know, the closing rates in other parts of the state,” he said. .

Some restaurant owners say they compete with other hourly wages in their area. (Kennedy Hayes/Fox News/Fox News)

Condi said restaurants also have low pre-tax profit margins, some as low as 3% to 5%, leaving little room for error.

According to the National Restaurant Association, food and labor costs are the largest costs for restaurants, each accounting for about 33 cents of every dollar in sales.

Some restaurant owners in Denver are still wondering what will happen balance their budgets so they can keep customers coming and staff happy.

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Joshua Miller is an employee of Sarpino's Pizzeria in Westminster, a northwest suburb of Denver. Miller said he got his start in pizza delivery and enjoyed his time in the kitchen learning. He added that earning more than minimum wage helps him make ends meet today rising cost of living.

“Minimum wage helps my rent. Gas prices.” Miller said.

Samar Sawaged owns the Sarpino franchise and said he pays all of his employees above minimum wage. Sawaged said many businesses like hers offer wages higher than minimum wage.

For many restaurants, significant cost increases are unsustainable, experts say. (Kennedy Hayes/Fox News/Fox News)

“Our big problem here is other pizza places,” he said. “People are fighting over hourly wages to get more.”

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Sawaged said he finds additional ways to help his employees financially with bonus opportunities.

Chi Li owns Chi's Express, a Chinese restaurant in Denver. Lee said the restaurant has fewer than 10 employees, which helps him balance his budget.

Some restaurants are choosing to cut hours or staff to make ends meet, experts say. (Kennedy Hayes/Fox News/Fox News)

“Because we're a small operation, we have a small menu as you can see,” Lee said, “so our costs, our food costs, will be a little bit lower.”

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Lee said they have adjusted for inflation by raising mixed meal prices.

According to the National Restaurant Industry, a restaurant needs about 12 employees to generate $1 million in sales, but a clothing store only needs four employees to generate the same amount.