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The Santa Fe Chamber of Commerce president, Simon Brackley, complained in a column on Sept. 23 in the Journal that the Santa Fe living wage, now at $10.29 per hour, has had harmful consequences for Santa Fe. This is disingenuous because the current Living Wage Ordinance, including the automatic cost-of-living increase now in the law, was the result of a 2007 compromise that was supported by the Santa Fe Chamber of Commerce.
The 2007 compromise provided for a cost-of-living increase every year. The logic and economics were very easy. We wanted to make sure that the minimum wage rate that was set in 2007 was preserved. We did not want it to be eroded by inflation.
In that same year, 2007, Albuquerque set its minimum wage at $7.50 per hour. However, because Albuquerque did not adjust its wage each year by inflation, the 8.32 percent increase in the cost of living since then has substantially decreased the value of its minimum wage. A worker would have to be paid $8.12 per hour today in order to have the same purchasing power that the worker had with $7.50 in 2007.
The proponents of the minimum wage increase in Albuquerque are right to insist that it preserve its buying power and not be eroded over time. The way to do that is to adjust it each year for inflation, as the ballot initiative proposes.
The biggest point that Brackley tries to make is that “businesses will close” in Albuquerque if the minimum wage is raised. This is the same thing he has been saying about our living wage for the last decade.
He cites two businesses which have closed in Santa Fe. One was Hastings Books and Music, which also closed stores everywhere else in the country, including Albuquerque, so that is hardly a result of our living wage. The other business may have closed for a multitude of reasons, including poor management and/or the great recession. He does not mention the many more businesses that have opened in Santa Fe in the last decade.
I do think Brackley makes a good point in suggesting that Albuquerque residents take a look at what has really happened here in Santa Fe. There are three key things to know about our living wage. First, our city council provided for four studies of the effects of the living wage. All of those studies show that there have not been any negative consequences of the wage.
Second, many businesses have opened in Santa Fe since the wage has been in effect. In fact, Walmart fought a battle to have its new store incorporated into the city limits despite that making them subject to paying all their employees the living wage. There is a long list of businesses that have opened or expanded in the last decade, including Kohl’s, Dion’s, other large chains and dozens of small, independent businesses.
Finally, Albuquerque voters may want to consider the unemployment rate in Albuquerque versus the unemployment rate in Santa Fe. Opponents of the living wage always predict greater unemployment with a higher wage. This is a scare tactic. All the economic evidence shows that wages should go into the hands of those most likely to spend, and thus, stimulate the economy.
The unemployment rate in Santa Fe is 5 percent, according to the latest statistics from the New Mexico Department of Workplace Solutions. The unemployment rate in Albuquerque is 6.8 percent. Of course, that doesn’t mean that our low unemployment is a result of the living wage alone. It does mean that arguments that the living wage has harmed Santa Fe are alarmist.
Ultimately, the decision on increasing a minimum wage is not an economic question. It is a moral question. Ninety percent of those receiving the minimum wage are adults. Many are single mothers. No one should work full time and still live in poverty. The real question is, what type of community do we want to live in?
