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© Copyright The New Mexican
By Henry M. Lopez
The New Mexican
Santa Fe’s
minimum-wage ordinance hasn’t affected overall employment levels in the city,
a University of New Mexico
study has concluded.
Some industries saw jobs decline after
the ordinance took effect about two years ago, the report said. But the
author says those decreases were in step with, or less severe than, a similar
trend in Albuquerque, which
didn’t have such an ordinance at the time of the study.
“If you look at the changing levels
(of employment) in Santa Fe and
changing levels in Albuquerque, Santa
Fe actually did a little better than Albuquerque
did overall,” said Nicholas Potter, a researcher with the university’s Bureau
of Business and Economic Research.
The Santa Fe City Council commissioned
the study after adopting the highest minimum-wage requirement of its kind in
the country.
The law’s advocates greeted the
results as further evidence that members of the Santa Fe
business community who mounted political and legal challenges were wrong in
predicting gloomy consequences.
A preliminary analysis released late
last year, which wage-law backers used in an unsuccessful effort to lobby the
New Mexico Legislature to raise the statewide minimum, also had reported no strong
evidence of damage to the local economy.
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Critics have maintained a wait-and-see attitude, saying ill effects from
phased-in increases could still lie ahead.
Meanwhile, Santa Fe’s experience
is being closely watched nationally as politicians seize on popular support
for boosting the $5.15-an-hour federal minimum and the adoption of localized
wage laws.
The ordinance initially established Santa Fe’s
wage floor at $8.50 an hour for employers with more than two dozen people on
the payroll, which included about 9 percent of businesses in the city as well
as some nonprofits.
After UNM researchers last year released the preliminary analysis, the City
Council allowed an increase to $9.50 an hour to take effect Jan. 1. The
ordinance calls for at least $10.50 an hour beginning in 2008, with council
approval.
The latest study, dated June 30, says affected Santa Fe
firms— in ZIP codes 87501, 87505 and 87507, excluding large employers known
to be outside city limits— added an average of 0.35 employees during the year
after the ordinance took effect in July 2004.
During the same period, overall employment levels among Albuquerque
firms with 25 or more workers decreased by 2.4 employees, the report states.
“The analysis shows that overall
employment levels have been unaffected by the living wage ordinance,” says
the report, which The New Mexican obtained through a public-records
request.
Albuquerque’s
City Council in April passed an ordinance that will increase wages in that
city in increments, even-tually reaching $7.50 per
hour by 2009. Santa Fe saw
employment decline in the health-care and retail sectors during the study
period, but the changes were in proportion to similar decreases in Albuquerque.
In the service-intensive hospitality
industry, which sees dramatic seasonal shifts, employment rates dropped twice
as much in Albuquerque as in Santa
Fe.
In the construction industry,
how-ever, Santa Fe firms with 25 or more employees saw employment
levels drop by 5.6 workers while Albuquerque’s rate decreased by 2.
Potter did not know why Santa
Fe showed a greater decrease than Albuquerque.
But data he saw suggested construction
activity was slowing months before the ordinance took effect, he said.
Carol Oppenheimer of the Santa Fe
Living Wage Network, which helped push for the ordinance and has monitored
its enforcement, said of the latest study, “This says we should be proud of
what we’ve done because it was the right thing to, and it was the moral and
ethical thing to do.” However, Al Lucero, owner of Maria’s New Mexican
Kitchen, was skeptical of the research results. “I think it’s still a little
too early to see,” he said. “Surveys are like polls; you take them for what
they’re worth.” The restaurateur said the wage increase cost him $80,000 last
year and he had to raise prices 5 percent.
“Hopefully it won’t destroy Santa
Fe’s economy,” he said, “ but
it’s not going to help it, either.” The Bureau of Business Research is
working on another study that will examine how the ordinance has affected
overall wage levels in Santa Fe,
Potter said. That study will look at how much, if any, the ordinance has
increased worker incomes and try to determine whether the higher mini-mum
wage has attracted workers from other cities.
Staff writer Natalie Storey contributed to this report.
ContactHenryM.
Lopez at 995-3815 or hlopez@sfnewmexican.com.
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