Chamber Wants Santa Fe Living Wage “Frozen” At Current Rate

Simon Brackley, left, president and CEO. of the Santa Fe Chamber of Commerce, and Alan Austin, president of N.M. Bank and Trust in Santa Fe, are calling for a freeze on increases to Santa Fe’s “living wage”

“The minimum wage is effectively a constantly increasing tax on businesses that create entry level jobs,” the chamber’s report, released Thursday, said.

“The best way to increase wages is to focus on job creation and prepare the workforce to fill the positions that are available, not to impose additional mandates on companies that are struggling to survive,” the report said in calling for a freeze on minimum wage increases.

Any such increases, it added, raise the price of goods and services, leading to a higher cost of living.

Santa Fe Mayor David Coss said he won’t consider freezing the wage. He said that Santa Fe experienced job growth every month for over a year, including an increase of 700 jobs last year, while other metropolitan areas in New Mexico have seen job losses.

“They (Chamber officials) have… regurgitated (the arguments) they were putting out in 2000 and 2002, but it’s not true,” he said.

“The bottom line for me is we’re the only city in New Mexico that’s gaining jobs,” Coss said.

Santa Fe also has the lowest unemployment rate in New Mexico: 5.1 percent in December, compared to the state’s 6.4 percent rate and 7.8 percent nationally.

Santa Fe has the second highest mandated minimum wage in the country, behind San Francisco.

The living wage ordinance was approved by the Santa Fe City Council in 2003 and enacted in 2004 with an hourly wage of $8.50. A provision for regular increases would have increased the rate to $10.50 by 2008.

However, after negotiations with the business community, the City Council axed the planned increase to $10.50 and replaced it with an annual cost-of-living adjustment.

Coss said he’s “sorry that the Chamber of Commerce has decided to renege” on the cost-of-living increase compromise. Brackley said he doesn’t remember such an agreement.

The chamber’s report said young people and workers with less education are hurt the most by minimum wage laws, saying the unemployment rate in Santa Fe for ages 16-19 is three times higher than in Albuquerque. Brackley said the numbers came from the New Mexico Restaurant Association.

“In this tight economy the hardest hit are people seeking their first job. With more and more mature people re-entering the workforce, it becomes even more of a challenge for a young person to find work,” the report said.

It also contends that higher wages motivate youths to drop out of school to get a job.

Employers having to pay $10.51 an hour are going to with a more experienced worker, Brackley said. “The young person finds it harder and harder to get into the job market because of this wage,” he said.

A federal Department of Labor report put the national unemployment rate for youth 16-19 at 24.4 percent in December.

Coss disagreed that Santa Fe’s living wage ordinance contributes to youth unemployment.

“There’s been studies around the country and here in Santa Fe by BBER (University of New Mexico’s Bureau of Business and Economic Research) and it’s just not true,” Coss said.

The chamber’s report also cites a 2005 analysis by University of Kentucky economist Aaron Yelowitz that says Santa Fe’s living wage was responsible for a 3.2 percent increase in local unemployment during the first year it was implemented.

He also found that it reduced worker hours by 1.6 hours a week.

The study was paid for by the Employment Policies Institute, described recently by The New York Times as a business-backed, non-profit research group.

A series of studies by BBER found that overall unemployment levels were unaffected by the living wage.

A BBER study released in August 2006 also found that the living wage didn’t affect youth unemployment, nor did it contribute to local kids dropping out of school.

“Overall, the economy in Santa Fe seemed to be doing fine and it still seems to be doing fine, and has kind of bounced back from the recession,” BBER director Lee Reynis said Thursday. She said a lot of the work BBER did on Santa Fe’s living wage is still applicable, but did note that the studies are several years old.

The chamber report also includes a list of businesses that have said the living wage, or its lack of a cap, was among their reasons for closing or downsizing Santa Fe operations. They include Hastings, Cloud Cliff Bakery, Science Toy Magic, the Wing Basket and the Village Inn.

Bill Healy, owner of the Green Owl Coffee Cafe, said that, without a cap on the wage, “you could go up to $20 or $30 an hour for someone doing dishes.”

“You can’t afford in the restaurant business or any business to have these types of wages. It’s incredible,” he said.