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Santa Fe’s living wage: Good or bad?

SANTA FE – Do not come to this city 10 years after it started requiring business owners to pay their workers more and think it holds irrefutable evidence that the move was either a boon or a disaster.

In this historic capital of 70,000 people, 10 years has brought a stalemate. Has the city’s living wage – now at $10.66 an hour – been an overall benefit? Absolutely. Not at all. Sometimes. Maybe. It depends. It’s complicated.

Since the rollout of a living wage in the City Different, not a whole lot is clear. At least not in the big picture. The unemployment rate stays where it always stays, lower than in the rest of New Mexico. Gross sales tax receipts have climbed back out of the trough of recession. The number of new business licenses issued rises and falls, never far from about 600 a year. The number of people working in the area’s leisure and hospitality sector, where the bulk of low-wage workers are employed, remains steady.

Good, bad or otherwise, surrounding Santa Fe County has just followed the city’s lead, bumping its minimum wage by more than $3 an hour to match the city’s $10.66 with annual cost-of-living increases. In Albuquerque, the state’s largest city and an hour’s drive south, the minimum wage rose this year to $8.60 an hour. All three ordinances, in some way or another, count health care or child care benefits as credit toward the minimum. All three also have provisions to ensure that those who work for tips or commission make at least the minimum wage.

Ana Garcia, right, chats with a co-worker while working her job at Blake's Lotaburger in Santa Fe on July 29. (Steven St. John/The Washington Post)

Ana Garcia, right, chats with a co-worker while working her job at Blake’s Lotaburger in Santa Fe on July 29. (Steven St. John/The Washington Post)

“One of the lessons learned is that the sky didn’t fall,” Mayor Javier Gonzales says. “The doom and gloom that was predicted never came to be. … But the living wage is not a silver bullet, either. It’s not a quick fix, and it alone won’t save the economy.”

Santa Fe’s wage is the second-highest city minimum wage in the nation, after San Francisco’s. (Seattle’s minimum wage eventually will surpass both with its phased-in $15-an-hour minimum.)

The ordinance creating it has evolved. What began with city workers and contractors in 2002 expanded to private businesses with 25 or more employees in 2004, which led “to a lot of games being played by business,” says Lee Reynis, director of the Bureau of Business and Economic Research at the University of New Mexico, which has done the most in-depth study of Santa Fe’s wage. (Employment thresholds invite end-runs – sometimes at the cost of part-time workers.) In 2007, a compromise extended the ordinance’s reach to all businesses within the city and tied the raises to the West Region Consumer Price Index rather than larger, fixed increases.

The emotion that attended the city’s first debates about the living wage long ago dissipated. The battle goes on quietly, fought now on the field of anecdote.

Stories circulate of people now being able to work fewer jobs, to spend more time with their families, of workers coming in from other parts of the state where the wage can be more than $3 an hour less. Also heard: Businesses cut overtime, cut benefits, closed, located elsewhere, raised prices on customers. Nonprofits that helped disabled adults were hit demonstrably hard. The most ominous view sees an exodus of high school students leaving the books behind, sapped of aspiration, because $10.66 with a guaranteed annual cost-of-living raise seems like a pretty good deal. A 2007 BBER study, its last comprehensive overview of the impact of the wage, examined this question and reported that the data on dropouts and why they leave school “are simply not good enough.”

A moral issue

Mayor Gonzales sits in the art-filled lobby of La Fonda Hotel, describing the living wage as both a moral obligation and an economic imperative. The chairman of the board of the hotel, passing by, greets him cordially and says: “The living wage hurts business in Santa Fe. I know you don’t want to hear that, but it does.” She tells him of a multimillion-dollar renovation project at the hotel that went to contractors from Albuquerque. Local contractors, saddled with higher labor costs, couldn’t compete, she says. Then she dashes off to a meeting.

After she leaves, he shakes his head. “There is a still a belief among business that, ‘Oh, it’s the higher labor rate that’s making us lose business to Albuquerque.’ It’s an easy thing to say and a hard thing to prove.”

(Gonzales touted the benefits of Santa Fe’s living wage Monday at a meeting of a U.S. Conference of Mayors task force in New York City, saying that – at its heart – it is a moral issue.)

It’s not clear how many workers have been directly affected by the wage ordinance, much less how many received a bump when that entry-level hire changing sheets next to them walked in the door earning more than they were. In 2004, BBER calculated that roughly 9,000 people worked in occupations in which entry-level wages were less than $8.50 an hour.

Santa Fe is dependent upon tourism. Its low-wage workers tend to be concentrated in retail and the city’s vital hospitality industry – food and accommodations. Many are young people working part-time jobs. They share apartments, rely on public assistance, work more than one job and did not or do not intend to remain in their jobs as cashiers, teaching assistants, home health aides, child care workers, cafeteria cooks, janitors, maids. Most are women or Hispanic men. In a city in which half the residents are Latino – many whose families have been in the area for generations – Hispanic men are 2½ times more likely than their non-Hispanic white counterparts to be earning minimum wage or less, according to a BBER study.

“Two Santa Fes”

The city of the postcard downtown plaza, of Navajo and Pueblo artisans laying jewelry for sale at the feet of tourists who shuffle by in long, thick columns of disposable income, of the opera and the chamber music festival and art galleries and fine restaurants, that’s one Santa Fe.

“But there are two Santa Fes,” says former City Councilor Frank Montaño, one of the councilors widely credited for laying the groundwork for the city’s living-wage ordinance. “And those two Santa Fes are like night and day.”

The other is the Santa Fe where 30 percent of children live in poverty, where the poverty rate for Hispanics is double that of white non-Hispanics, and where, according to the most recent U.S. Census Bureau estimates, roughly 54 percent of the Hispanic population 25 or older never attended college.

It’s the Santa Fe where housekeeping supervisor Betty Quintero helps fold towels in the hot and fragrant air of a hotel laundry room.


(The Washington Post)

“We talk about this all the time,” Quintero says. “We were looking so forward to it when it was coming. I thought, ‘Oh, how exciting. There is going to be a big difference.’ ” She shrugs. “The pay went up. The rent went up. The food went up. I make more than minimum wage, and I’m still struggling. … In all honesty, it’s upsetting because everyone always says, ‘Oh, the minimum wage is great there.’ No, it’s not. You still can’t break even.”

What no one disputes is that the living wage has served to sharpen the focus on underlying structural problems: the high cost of living, a severe lack of affordable housing, a struggling public school system, and an economy heavily reliant upon the recession-vulnerable tourism and government sectors.

For now, change happens minutely, in tiny steps that one day may add up to something. Ana Garcia counts them this way: the new plasma TV in the living room of the mobile home she and her husband finally saved enough money to buy three months ago; the tiny yard where they put a slide for their children; the living-room and bedroom sets they are eyeing – the first furniture that will not be rent-to-own.

“We never actually bought something that we knew was going to be ours,” she says.

Garcia is 22 and works for Blake’s Lotaburger; her husband is a landscaper who earns about $12 an hour.

Several months ago, Ana called her younger sister, Jessica, who was working for $7 an hour at a McDonald’s in North Carolina. “You need to come out here,” she told her. “You’ll make, like, almost $11 an hour.”

And so Jessica did. She works at McDonald’s, and she and her son live with Ana, her husband and their two sons in their new three-bedroom, two-bath mobile home on the south side of town.