As N.M. legislators debate increasing the state’s $12-an-hour minimum wage, it’s essential they remember the two sides to every coin that goes into paying that wage:
Employee and employer
While advocates for increasing the minimum wage to the neighborhood of $15.55 an hour maintain it’s needed to help ensure low-income workers can afford to pay their bills, their analysis doesn’t go beyond those employees.
Employers, the other side of the coin, will have to cover the increase, along with higher prices on everything from eggs to gasoline. To make the math work they will have to cut staff, cut hours of operation and/or raise prices. While Rep. Christine Chandler, D-Los Alamos, sponsor of one of the bills, says the doom predicted after the last statewide increase, to $12 an hour, hasn’t come to be, that took effect mere weeks ago; her victory lap is premature.
Rep. Andrea Reeb, R-Clovis, calls this latest legislation “actually a tax hike, and it’s going to raise the cost of food.” George Gundrey, owner of Tomasita’s restaurants in Santa Fe and Albuquerque, deemed it an “attack on our family-owned businesses.” The N.M. Chile Association, the state’s Cattle Growers’ Association and the Greater Albuquerque Chamber of Commerce are all against it.
Urban and rural
Missing in the debate are the differences in cost of living and cost of doing business across our large state. Jal and Wagon Mound are not Albuquerque and Santa Fe, and small businesses (and consumers) in rural New Mexico can’t afford what those in urban areas can.
One size does not fit all when it comes to a minimum wage across the fifth-largest state in land mass.
Good economic times and bad
One of the most controversial aspects of the proposed increases is tying them to inflation. The Albuquerque Chamber notes “such a proposal fails to recognize that high-inflationary times are brutal for small businesses, raising their energy costs, inventory costs, transportation and shipping costs, and virtually everything else. On top of it all would apparently be a big increase in the cost of labor, too – an additional burden at the most inopportune time.”
Our small, local businesses are still trying to recover after the blows of the pandemic, economic downturn and inflation. While employees most certainly struggle to make ends meet, so, too, do their employers. KRQE-TV reported in July 2021 that “only around 60% of New Mexico’s small businesses pre-pandemic are still open.”
Experienced workers and first-time hires
N.M.’s minimum wage law used to include a lower training wage – $8.50 an hour – for high school-age workers; the 2021 legislation eliminated that. Proponents argued we should not create a sub-class of employees, and if all were of the same cookie-cutter mold we’d agree.
But if employers are required to pay $15.50 an hour, they simply will not hire those with little to no experience or troubled work histories if they have a choice. Gundrey has told the Journal Editorial Board a higher mandated wage makes employers like Tomasita’s think twice about hiring felons or those who struggle with English, reading or math, and giving those who miss work or show up late a second chance. That does not bode well for programs like Job Connect, which was just launched to get local businesses to hire homeless individuals.
We understand with a record surplus, some lawmakers want to share the wealth via a higher minimum wage. But that increase has ripple effects throughout our economy that must be considered if the goal is to not just raise wages but have vibrant private sectors and get more New Mexicans into the workforce. Gov. Michelle Lujan Grisham’s spokeswoman has said she will balance supporting workers with creating a “business-friendly climate.”
We ask lawmakers in both chambers as well as the governor to seriously consider the impact of these bills on all of New Mexico.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.