Minimum
wage issue caused maximum debate
By LOREN STEFFY
Copyright
2006
Without any previous experience, Cornejo
began working four months ago as a teller for Wells Fargo here. He makes $9.50
an hour.
Cornejo, 19, isn't alone.
Across this resort community, dishwashers, janitors, painters, landscape
workers, all make $9.50 an hour as a starting wage.
Two years ago,
In a city where a loaf of bread costs $2.29, a gallon of milk runs
$4.50 or more and a gallon of gasoline sells for about $3.15, the federal
minimum wage was basically a guarantee of poverty for full-time workers.
"It's not just something we want, it's something we need to
live here," Cornejo says. "Everything was
going up except the wages."
Most business owners agree, although they don't see a mandatory
$9.50 an hour as the solution. A few minutes away from the bank where Cornejo works, Beth Draiscol runs
the Zia Diner, a local favorite she opened in 1986.
Draiscol says she favored a higher minimum wage,
but she staunchly opposed the city ordinance. The rate was too high, and as a
business owner she can't plan her labor costs because of the prospect of future
increases. The city, for example, will consider another increase in 2008 that
could raise the minimum wage to $10.50.
"That's an amazing amount of money to pay somebody who's
never worked in the business before," Draiscol
says. "I feel like I'm being punished for being in business in this
town."
In
some ways, the living-wage battle divided the city, and many supporters still
tend to characterize business owners who opposed it as simply greedy. But the
fight didn't pit workers against big business so much
as small-business owners against their employees, which Draiscol
says she resents.
"
The Zia has about 65 employees and
generates annual sales of about $2 million. Draiscol's
labor costs run about $750,000. To account for the higher wage, she's raised
her prices by about 10 percent.
Across
town, Al Lucero, who owns Maria's New Mexican Kitchen, says he raised prices by
about 5 percent. Neither he nor Draiscol have noticed
a drop in business because of the higher prices.
That, proponents say, proves the point. The community, which
overwhelming supported the living wage, is willing to pay more to support
higher wages. Morty Simon, a local lawyer who with his wife, Carol Oppenheimer,
were major organizers of the living-wage effort, says
higher wages have a multiplier effect. More discretionary income means more
money to spend in the local economy.
"I'm proud of this city," says Larry Keller, owner of
Design Warehouse and one of the few business owners who supported the
ordinance. "For me, it's a common-sense issue. If you want people to do
good work, you have to pay them a salary that they can live on."
With only about eight employees, Keller's store wasn't covered by
the new law, which applies only to businesses with 25 employees or more.
Keller, however, says he was already complying with the terms of the ordinance
before it was adopted.
After two years of living with the living wage, it seems the
wounds of the battle may be healing somewhat, and business owners such as Draiscol and Lucero say, in hindsight, they would do things
differently.
Asked if he had advice for business owners in other cities that
are considering a living-wage ordinance, Lucero, who was one of the provision's
staunchest opponents, said finding a compromise early is important.
Public sentiment, he warned, will work against them, as it did in
Support for a living wage is emotional and political "with no
thought given to what it's going to do to business and the economy long
term," he said.
During
"The business community had no intention of any sort of
compromise," she says. "They were pretty much contemptuous of this
idea."
Draiscol acknowledges that business owners may
have been knee-jerk in their opposition.
"As business people we tend to be so antiregulation
that perhaps we just dug our heels in instead of trying to reach a
compromise," she says. "Businesses really do need to realize that
minimum wages have to go up."
If the federal government doesn't take action, then states and
cities will, she says.
Nowhere is that lesson more obvious than here.
In
Wednesday's column, I misspelled the name of Santa Fe Mayor David Coss.
Loren Steffy is the
Chronicle's business columnist. His commentary appears Sundays, Wednesdays and
Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.