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LAS CRUCES – Mayor Ken Miyagishima caught flack from some city councilors Monday during a work session for suggesting the city temporarily decrease the minimum wage for tipped workers to help business owners ailing from the economic effects of the COVID-19 pandemic.
“Restaurants are literally on life support,” Miyagishima said. “There’s no relief coming in from Congress.”
“Low wage workers are also on life support,” District 4 Councilor Johana Bencomo said. “I don’t want to take a living wage away from someone who’s living comfortably off that wage.”
On Jan. 1, 2021, minimum wage will increase to $10.50 an hour statewide. In Las Cruces, it’s a 25-cent increase from the current wage.
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The city’s minimum wage increased from $10.10 to $10.25 per hour Jan. 1, 2020 because of a city ordinance tying the wage to the cost of living. Statewide, the minimum wage increased from $7.50 to $9 an hour in 2020 and is planned to hit $12 by 2023.
In Las Cruces, the minimum wage for tipped workers is, by ordinance, 40 percent of the city’s current minimum wage. On Jan. 1, that wage is set to rise from $4.10 to $4.20. Tips make up the rest of the employees’ pay, and it can lead some tipped workers to make much more than the minimum wage.
Statewide, the tipped wage will remain $2.35 an hour Jan. 1, according to city staff. In Las Cruces and the rest of the state, employers must make up the difference if a worker’s tips cause them to earn less than the state or local minimum wage.
Temporary relief for owners
The mayor proposed temporarily fixing tipped wages to the state rate for at least six months to ease the financial burden on businesses which have seen sales decrease and have been mandated to operate at lower capacities due to the pandemic.
“I really think business owners are going to weigh whether or not it’s even worth staying open,” the mayor said. “Now you’ve got an employee who has no job.”
In the summer of 2021 or later, if the economy is in better shape or a vaccine has begun to be distributed, he said the $4.20 wage could go into effect. The mayor’s proposal would require the council to amend the city’s current ordinance.
Tipped workers would still have to receive a minimum of $10.50 an hour between tips and the tipped wage.
Are you a business owner or a tipped worker and have something to say about this proposal? Email firstname.lastname@example.org.
District 2 Councilor Tessa Abeyta Stuve said she disagreed with decreasing the city’s tipped wage. Having worked as a food server in the past, Abeyta Stuve said she wanted the mayor to be conscious of giving relief to workers as much as owners.
District 1 Councilor Kasandra Gandara said she couldn’t imagine it’s tougher for owners than it is for workers right now.
“It’s difficult for those low wage earners as well,” Gandara said.
Miyagishima, interrupting Gandara, exclaimed that councilors have no idea what it takes to run a business. He said it’s been tough for owners to make payroll during the pandemic, and the next few months may prove to be the most difficult due to less federal relief.
‘Rent, groceries … don’t have a fixed rate’
Bencomo said she was disappointed in the mayor’s comments, since her parents are small business owners.
“There is no reason to get personal,” she said.
Bencomo serves as executive director for the nonprofit New Mexico Comunidades en Acción y de Fé (NM CAFé), which was a major force behind the successful campaign to enact the higher Las Cruces minimum wage ordinance in 2014.
“Rent, groceries, those things don’t have a fixed rate, and those things continue to go up,” Bencomo said.
During the Sep. 14 work session, Las Cruces Chief Budget Officer Leann DeMouche presented the council with two options going forward regarding the minimum wage, since the state and city are currently operating under different wage-setting mechanisms.
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Every Jan. 1, under the city ordinance, the minimum wage will increase based on the cost of living, which itself is based on the Consumer Price Index from the previous August. While the city must adhere to the state’s increases if it ends up being higher, the city can also choose to impose a higher wage than the state.
After the city’s wage hits at least $12 by 2023, in line with the state, it will continue to increase alongside the cost of living in subsequent years. That means it could rise higher than $12 if that’s what the CPI dictates.
The city council could repeal its minimum wage ordinance and let the state law dictate the city’s wages. Or, the city could continue to use its ordinance by comparing the state’s increase each year against the city’s proposal, derived from the CPI, and adopt the higher. Then, it could apply the 40 percent rule in calculating its tipped wage.
Assistant City Manager Barbara DeLeon said the impact of sticking to the state minimum wage would mean businesses could set a long term budget without worrying about the effect of the August CPI.
The council is expected to hold a work session in the coming weeks to discuss the proposal further. The city is required to advertise the upcoming wages by Oct. 15, so the council is on a deadline to decide.
Michael McDevitt can be reached at 575-202-3205, email@example.com or @MikeMcDTweets on Twitter.
This article originally appeared on Las Cruces Sun-News: Mayor Ken Miyagishima suggests temporary decrease in minimum wage for tipped workers
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