Restaurant owners plan to show up in force Friday to oppose a proposal that would raise New Mexico’s minimum wage, saying it would devastate their bottom line.
House Bill 31 calls for New Mexico’s minimum wage to increase to $10 an hour from the current $7.50, starting in July. That rate would go up to $11 next year and $12 the following year. Starting in July 2022, annual increases would be tied to the inflation rate.
The bill also contains language that would eliminate the existing lower base wage for tipped employees and replace it with the new $10 minimum. Employers now can pay tipped employees $2.50, as long as the worker’s income, including tips, totals the minimum $7.50 an hour. If it doesn’t, the restaurant owner is supposed to make up the difference.
The measure is to be heard Friday by the House Commerce and Economic Development Committee.
Supporters of the bill say it’s time minimum wage workers received a raise after a decade of no increases.
“Minimum wage workers are past due for a raise,” said Rep. Miguel Garcia, D-Albuquerque, one of the measure’s sponsors, at a recent news conference.
George Gundrey, owner of Tomasita’s Restaurant in Santa Fe and Albuquerque, said if, for example, he had to pay 10 servers $11.40 an hour, the annual hit to his bottom line would be $450,000.
“It’s not a question of having to raise the price of an enchilada to pay for this, it’s a question of destroying the business model,” Gundrey said during a Journal editorial board meeting this week.
He said many legislators underestimate how much servers can actually make under the current structure. He said his servers can make from $15 to $35 an hour on tips.
Marlene Trujillo, a server and bartender in Albuquerque, said her pay would likely go down if the bill were approved because customers would have to pay higher prices for their meals and likely would stop tipping.
“If this bill passes, I will go back to taking an entry level wage and on top of that, most customers won’t be as inclined to tip because of the price inflation on the food to cover the cost of paying me,” Trujillo said.
State Department of Workforce Solutions data show that under the proposed legislation, more than 110,000 New Mexico workers — most of them women — would get pay raises starting in July.
Bill McCamley, who heads the department, said the bill is closely aligned with the agenda of new Gov. Michelle Lujan Grisham.
“The governor believes no one should work 40 hours a week and live in poverty,” McCamley said.
