Monday, May 16, 2005
Santa Fe Wage Debate Heads to Albuquerque
By Jim Ludwick
Journal Staff Writer
Some say the local minimum wage in Santa Fe has helped that city's economy, but others argue it's driving away business.
The intense controversy that has engulfed Santa Fe for the past two years is about to hit Albuquerque.
City councilors will open discussion today of a proposal to put a minimum wage on the Oct. 4 ballot. It would be $7.15 per hour for regular employees, $2 higher than the federal minimum wage. The minimum for employees who earn tips would be $4.15.
Councilor Martin Heinrich, who is sponsoring the proposal, says a decision is not expected today.
The issue has played out in other cities with mixed results. More than 100 communities have local wage laws, but overwhelmingly their laws apply only to companies doing business with the city, not to everyone in town.
New Orleans approved a general minimum wage, but it was thrown out in court.
The city council in Santa Monica, Calif., approved a minimum wage, but it was later put on the ballot by referendum and rejected.
In Wisconsin, minimum wages have been approved in Madison, Milwaukee and La Crosse. Critics have gone to the state legislature with a proposal for a statewide ban.
Santa Fe's minimum wage is much higher than the figures Heinrich proposed, and there is considerable disagreement about the results.
The Santa Fe ordinance calls for $8.50 an hour, increasing to $9.50 starting Jan. 1, 2006, and $10.50 starting Jan. 1, 2008. It was approved in 2003 amid intense opposition, and it now faces a court challenge. The challenge is based on claims that the Santa Fe City Council lacked authority to dictate wages in the private sector.
There has apparently been job growth in Santa Fe. The most recent report from the state Department of Labor shows 61,100 jobs, an increase of 1,400, comparing March to a year earlier. The leisure and hospitality industry added 200 jobs. Retailing was unchanged.
Gerry Bradley, economist with New Mexico Voices for Children, says the minimum wage has helped the economy because low-income people spend their additional money.
"When you raise the wages of low earners, you raise consumption," he said. "This is something that lifts the economy. It would be better to have it throughout the country, and it would be better to have it statewide. ... But if we can do something for Albuquerque, we should do it."
Others have a different view of the Santa Fe experience. Carol Wight, chief executive of the New Mexico Restaurant Association, said businesses such as the Chili's restaurant chain have decided against opening Santa Fe locations because of the wages, and she says the worst is yet to come.
"There are restaurants that are waiting for their leases to end before they move out of town," Wight said.
Marianne Pratt, president and chief executive of the Santa Fe Chamber of Commerce, said there's "tremendous concern" about the upcoming increase to $9.50.
She said the minimum wage costs more than anticipated, because it tends to also increase the pay of employees who are above the new minimum.
Albuquerque Mayor Martin Chávez said a local minimum wage "is legislation that should stay in Santa Fe."
Chávez said he favors an increase, but "you can't do it on a municipal level. You'd get a checkerboard that would drive businesses out of cities."
Five of the nine councilors say they oppose a local minimum wage, and Chávez says he'll veto it if it reaches his desk.
Heinrich hopes critics on the council will let the public decide, even if they personally oppose it. He said there could be a petition drive to put the question on the ballot if he fails to win council support.
"The issue isn't going to go away, even if the council refuses to deal with it," he said. "I hope the councilors approach this in the way they have approached other ballot initiatives and say that, whether they agree with it or not, the public should decide."
Among those expected to testify before the Albuquerque City Council today is Dana Gallegos, a 30-year-old who is raising three children. She makes $6.65 per hour as a cashier at Wal-Mart.
"I have to get food stamps or I wouldn't be able to make it," she said. "It's hard. You have to budget your money real tight. ... People are afraid they will end up homeless."
Arguments by those in favor of a local minimum wage:
The federal minimum wage of $5.15 is too low, and there's not much chance it will be changed soon.
A higher minimum wage would help the local economy as low-income people spend the additional money.
Other cities, including Santa Fe, have tried a minimum wage without apparent harm.
A higher minimum wage would help move people from welfare to work.
Arguments by those against a local minimum wage:
The minimum wage should be changed nationally instead of locally.
City government was never intended to micromanage the economy to this extent.
The federal government is equipped to handle wage-law enforcement, but the city isn't.
A higher minimum wage would make it less feasible for businesses to provide certain jobs.
The City Council is to discuss a local minimum wage proposal during its meeting at 5 p.m. today at City Hall. A final vote is not expected until later.