Wednesday, December 14, 2005

Number of Jobs Up With Wages

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    EDITORIAL: Santa Fe's living wage opponents have been lobbying for some months now to get the City Council to postpone the second phase of the law, which in January is scheduled to raise the minimum wage for many workers to $9.50 an hour.
    There are good arguments about the merits, including whether a government mandated wage of $9.50 an hour for unskilled labor is a good, or even reasonable, idea.
    But the main thrust of arguments by opponents has been that the high wages would force businesses out, or cause them to lay off workers, causing a rise in unemployment.
    Preliminary data from a University of New Mexico study of the law's effects on Santa Fe's economy doesn't support this view— although this is contradicted by feedback from focus groups done in conjunction with the study.
    Preliminary results from the study by UNM's Bureau of Business and Economic Research indicate the law, which so far has raised the minimum wage to $8.50, seems to generally have been good for workers without harming the local economy.
    Anecdotally, according to focus groups and surveys conducted for the UNM report, businesses reported many negatives— that expenses are increasing faster than revenues, they've cut jobs through attrition, cut overtime and extended the time needed for workers to qualify for benefits. They also say they are less likely to hire the disabled, teens or less-skilled workers at the higher pay rate. Some workers interviewed said they'd lost jobs or had to take on new duties.
    But the hard numbers of the report say the work force is growing month to month in Santa Fe with the living wage in place. Downside: The unemployment rate in the Santa Fe metro area is up, although it is still lower than in Albuquerque and the state as a whole.
    "Implementation of the living wage does not appear to have resulted in employment declines," the report says. "Many sectors of the Santa Fe economy have experienced strong growth since the minimum wage went into effect in July 2004."
    For workers, the average wage in Santa Fe's private sector has increased, but apparently so has the cost of living. The number of families on the welfare rolls has fallen; the number on food stamps has increased.
Some workers report being able to work fewer hours or fewer jobs.
    As the study notes, both businesses and workers are under pressure from rapidly rising costs. Santa Fe's cost of living, already 20 percent higher than the national average, has risen 9 percent in the city since mid-2003— more than twice as fast as in the country as a whole. The result has been increased overhead for businesses, above and beyond the wage increase. Despite increased wages, workers may still be living paycheck-to-paycheck.
    A final version of the UNM report is expected in about six months, with more economic data and specifics on jobs and wages.
    Until then, the study obviously gives the City Council a lot to chew on as it decides on how to proceed with its wage experiment.