Pay’s bottom line

 

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“Small business cannot thrive with a mandated living wage.” Ty Juana Hise, Cemco Inc.

By David Miles The New Mexican |
January 27, 2006



Santa Fe’s minimum-wage ordinance drew cheers and jeers from those who testified Thursday on a bill to increase the state minimum wage to $7.50 an hour next year.

Some supporters of the measure said employment has grown in Santa Fe since the city’s minimum wage ordinance took effect in 2004, while City Councilor David Pfeffer said the report cited by supporters was preliminary and flawed.

The House Labor and Human Resources Committee on Thursday endorsed the measure (HB258) on a 5-2 vote after 3 1 /2 hours of debate. The bill, which is sponsored by House Speaker Ben Luján , D-Nambé , advances to the House Business and Industry Committee for consideration.

Wage-increase supporters pointed to a preliminary report by The University of New Mexico’s Bureau of Business and Economic research that said employment has increased since Santa Fe implemented the first phase of its minimum wage ordinance in 2004, which set the city’s pay floor at $8.50 an hour. Santa Fe’s hourly minimum wage increased this year to $9.50 — the nation’s highest pay floor — and is slated to increase to $10.50 in 2008, pending another City Council vote.

Carol Oppenheimer, co-coordinator of the Santa Fe Living Wage Network, called the city’s minimum-wage ordinance a model for the rest of the country and said the UNM study proves naysayers wrong. “These doomand-gloom predictions are wrong,” she said.

But Pfeffer noted the report was preliminary and said the final study is not expected to be released until May. He also said the report was flawed because it included countywide employment statistics.

Santa Fe also lacks statistics on the number of undocumented immigrants working in the city, Pfeffer said. “We don’t know if it’s working just fine,” Pfeffer said of the city’s minimum-wage ordinance.

Pfeffer said there are reports of Santa Fe businesses laying off workers, cutting employees’ work hours, raising their prices and considering leaving town since the city enacted its minimum-wage ordinance.

Representatives of several business groups predicted the proposed minimum-wage hike would result in job losses, employee-benefit cuts and businesses moving to other states. “Small business cannot thrive with a mandated living wage, and neither can New Mexico,” said Ty Juana Hise, a co-owner of Cemco Inc., a Belen firm that manufactures rock crushers.

But business owners were not uniformly opposed to a minimum-wage increase. Carolyn Sigstedt-Stephenson , co-owner of Santa Fe’s Mission Café and Sweet Shop, said she pays her nine employees $9.50 an hour even though she is not required to do so under local ordinance. “We believe that it is only right,” she said.

Luján suggested the state does not need businesses that would be unwilling to pay employees $7.50 an hour and said the proposed minimum-wage hike would help lift New Mexicans out of poverty. “There are far too many people who are struggling to make ends meet,” Luján said.

New Mexico’s current minimum wage is $5.15 an hour, which is the same as the federal pay floor. Congress has not raised the federal minimum wage since 1997, and 17 states have higher pay floors than the federal rate, according to the U.S. Department of Labor. Roughly 123,000 New Mexico workers are paid less than $7.50 an hour, according to the state Department of Labor.

Under Luján’s bill, New Mexico’s minimum wage would rise to $7.50 next January, then adjust annually to account for inflation starting in 2008.

Two other Democratic leaders are seeking to increase the state’s minimum wage to $7.50 an hour.

Senate President Pro Tem Ben Altamirano, D-Silver City, has introduced a bill (SB449) that is backed by Gov. Bill Richardson and would phase in the pay floor increase over three years. It does not include an inflation-adjustment provision.

Senate Majority Leader Michael Sanchez, D-Belen , has introduced a bill (SB462) to raise New Mexico’s minimum wage to $7.50 an hour next January , with no inflation-adjustment provision.

His bill also would provide a tax credit for three years to businesses with 25 or fewer employees and annual revenues of less than $5 million to help offset the additional cost of the proposed minimum wage.

Rep. Dan Foley, R-Roswell , on Thursday introduced a bill (HB552) to keep the state’s minimum wage at $5.15 an hour and bar local governments from setting higher pay floors than the federal rate. Contact David Miles at 986-3036 or dmiles@sfnewmexican .com.