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Las Cruces business owners urge city to reconsider minimum wage hike

LAS CRUCES – Angry business owners on Monday urged the Las Cruces City Council to reconsider increasing the city’s minimum wage in January.

The City Council in 2014 approved a three-step increase in the minimum wage. The final step will increase the minimum wage to $10.10 an hour in January 2019. The current rate is $9.20 per hour.

The minimum wage in most of New Mexico, including the rest of Doña Ana County, is $7.50 an hour, though Albuquerque and Santa Fe, and the counties where they are located, have also implemented a minimum wage higher than the rest of the state.

“We’re going to see a lot of businesses closing,” said Buffy Johnson, who owns Home Instead Senior Care. “Maybe we need to reconsider this. I don’t think it’s prudent to do it at this time.”

The minimum wage increase wasn’t on the agenda for Monday’s City Council meeting. All the speakers spoke during the public comment period. In all, 10 different people spoke out against the increase and urged councilors to reconsider it.

Mayor Ken Miyagishima was clearly surprised by the outpouring of criticism, asking speakers why they didn’t attend a work session held during the summer about the minimum wage increase. Most of the speakers said they didn’t know about it.

“When you didn’t show up for the summer meeting,” Miyagishima said, “I assumed everything was fine.”

Owners of daycare centers and restaurants were the most represented among the speakers. Both industries have many minimum wage workers.

Daycare owners were the most vocal critics. Four spoke and they said the higher minimum wage would negatively affect their businesses, including in ways that aren’t generally part of the discussion about minimum wage increases.

All said they couldn’t afford to increase their rates to fund the wage increase because many of their customers struggle to pay for child care already. In addition, the amount of money they receive for customers who get state child care subsidies would not increase.

But they also said they could lose business if customers who rely on state child care subsidies based on income lose those subsidies if their wages increase. They said two parents earning minimum wage would no longer qualify for a state child care subsidy if the wage hike is implemented.

“This is going to make child care centers have to close their doors,” said Sheri Seay, owner of Little Tumbleweeds daycare. “We can’t raise our prices. We’re maxed out.”

Maria Griego, a staff attorney with the New Mexico Center on Law and Poverty said in 2017 that she crunched the numbers and found Las Cruces’ minimum wage increase likely will not affect child-care subsidies.

Multiple speakers criticized the City Council for ignoring the results of an economic impact analysis funded by the city and produced by the Texas-based Hibbs Institute for Business and Economic Research in June that found that the minimum wage had some negative impacts.

The report found that economic growth in the city had slowed since implementation of the first minimum wage increase. It also found that the city’s unemployment rate had remained higher than state and national levels.

The analysis also found that employment in certain industries — food preparation, sales, and health care support — had declined since the first minimum wage increase was implemented. The report cautioned that it wasn’t possible to demonstrate for certain that the minimum wage increase was the cause of those negative economic trends.

Restaurant owner Arif Kahn, owner of Thaindia and two other restaurants planned for downtown, said it wasn’t too late for city officials to change course.

“Just because we have made a decision doesn’t mean we have to go through with it,” he said. “Look at the reality of life. Look at where the economy is. Las Cruces is a great city. People could have a very good living here if we do it right. But if we continue to shoot ourselves in the foot, we’re not going to make it.”

Blake Gumprecht may be reached at 575-541-5453, bgumprecht@lcsun-news.com or @blakegumprecht on Twitter.

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