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Santa Fe will soon have the highest mandatory minimum wage in the nation. Government officials announced Thursday that the required “living wage” for city workers will increase to $10.29 an hour, starting March 1.
That puts the City Different ahead of San Francisco, where the minimum wage went up to $10.24 an hour the first of the year.
“I feel very positive about our living wage law, and I think the process we’ve started to notify businesses and the public about how the wage is adjusted gives business people a good month to get ready,” Santa Fe Mayor David Coss said.
Coss acknowledged that the wage increase will be challenging for local businesses. However, studies indicate Santa Fe’s living wage hasn’t had a negative affect on vital components of Santa Fe’s economy, such as job creation and unemployment, he said.
Santa Fe’s minimum wage is currently $9.85 per hour. But a city ordinance requires that wage hikes be recalculated every year based on a federally determined annual consumer price index for the western United States.
On Thursday, the federal Department of Labor’s Bureau of Labor Statistics announced that, over 2011, the index had increased by 2.8 percent.
Also factored into the $10.29 figure is a CPI increase from 2010 that Santa Fe officials failed to notice and implement.
That increase would have brought Santa Fe’s wage to $9.99 an hour last year.
Simon Brackley, president of the Santa Fe Chamber of Commerce, said his organization is “strongly opposed to increasing the minimum wage again in this economic climate.”
“This will make Santa Fe unable to compete with neighboring communities. Effectively, this increase is going to be a tax on businesses who want to hire entry level employees,” Brackley said.
Brackley said the only way businesses will be able to survive is to raise prices, which leads to a higher cost of living and undermines Santa Fe’s competitiveness.
The living wage ordinance was originally adopted in 2002, with an initial rate of $8.50 an hour and a provision for regular increases that would have meant a rate of $10.50 by 2008.
In late 2007, after negotiations with the business community, the City Council axed the planned increase to $10.50 and replaced it with a an annual cost-of-living adjustment corresponding to the previous year’s increase in the western region CPI.
The chamber believes the living wage should be capped, Brackley said, though he added that it’s too soon to discuss whether the organization might launch a formal campaign in support of the position.
Coss said he doesn’t believe that capping Santa Fe’s living wage is a viable option. It’s important to adjust the wage to account for inflation, he said.
“It was a lot of work and I would hate to do something to the law that put us in the position we were in six years ago where the law was meaningless, it was so far below the poverty level,” Coss said.
