Wage Law Has Little Effect
By Russell Max Simon
and Kiera Hay
Journal Staff Writers
Nor has it created job growth.
"The analysis shows that overall employment levels have
been unaffected by the living wage ordinance," the study reads.
The study does detail drops in employment in some
high-profile sectors of the
The study concludes that the hotel, restaurant, retail and
health care sectors on average actually reduced their work forces in the two
years since wage law became effective. Restaurants and hotels affected by the
law cut an average of 4.3 employees, while retailers trimmed an average of 3.5
employees. The health care industry was hit harder, losing 11.6 employees per
business.
But the study says the job losses were not the result of the
living wage law, since the trends reflect similar declines in
"Overall, this analysis found that the living wage ...
had no discernible impact on employment per firm, and that Santa Fe actually
did better than Albuquerque in terms of employment," the report states.
The Santa Fe Living Wage Network's Carol Oppenheimer said
the study should help combat opponents' claims that the living wage law would
mean economic disaster.
"You have to look at this whole issue in the context of
the doom and gloom that we heard when the City Council first passed it, that
this was going to spell the end of a thriving economy," Oppenheimer said.
"This program was never passed as an economic stimulus
package. ... It was passed in the context of a moral framework that said no one
should have to work on the lower wages," she continued.
Santa Fe Chamber of Commerce President Simon Brackley said he had not read the report and declined to
comment, while representatives from the
Passed by the City Council in 2002 and first imposed in June
2004, the ordinance raised the minimum wage from the federal level of $5.15 an
hour to $8.50 an hour, a 65 percent increase. The law only applies to
businesses with 25 or more employees. In January, the wage requirement was
raised to $9.50 an hour.
The job numbers in the new report represent a comparison of
Department of Labor employment figures for the year after the law went into
effect— July 2004 through June 2005— to the previous year.
Robbie Day, owner of San Francisco Street Bar and Grill and
Santa Fe Bar and Grill, said he's had to decrease his 120-plus work force by 10
to 16 workers since the ordinance took effect.
Consequently, some of his remaining workers— such as those
on a salary— have had to work harder, he said.
Day, who along with the Chamber of Commerce and other
businesses unsuccessfully sued to overturn ordinance, said he believes the law
has made it harder for
The city's food industry employees are more likely to end up
working at small restaurants that aren't required to pay the living wage, he
added. "I don't believe this is the way we want to go," he said.
Researchers at BBER chose
"The opposition was demanding this kind of study,"
said Gerry Bradley, research director for Voices For
Children, an Albuquerque-based advocacy group.
"It's a zero sum game in some ways. You're taking money
away from employers and giving it to employees, so it's not something that
accelerates the economy, and I wouldn't expect it to. But it does help people
at the bottom of the income distribution," Bradley said.
The study itself acknowledges certain shortcomings:
"This method rests on the two regions (
BBER director Lee Reyner said:
"It's not easy to say, 'This is good, or this is bad.' There are going to
be some businesses for which it's a much more significant adjustment than for
others. And there may be some areas of the economy that are just not going to
grow and prosper."
One of those areas, according to the study, may be
But builders say the slowdown is not being caused by the
living wage. "From the information we have, I don't see any correlation to
that at all," said Gary Ehlert, head of the
Santa Fe Area Homebuilders Association.
Mike Chapman of Chapman Homes agreed. "I would say
there's not a direct effect," he said.
Contractors, who rely on skilled workers, have historically
paid their employees high wages, Ehlert said.
And Chapman, who said he pays his 22 employees more than
$9.50 an hour, has seen his company's numbers remain steady over the past year.
Both Ehlert and Chapman said the
construction slowdown in
Santa Fe Mayor David Coss, a supporter of the living wage,
acknowledged the lag in construction may have been caused by back-logged
building permit requests, the city's water-saving toilet retrofit program and
an uncoordinated annexation policy.
Coss also said he doesn't expect the study to silence the
law's opponents.
"You could take all the economists in the world and lay
them end to end and you still wouldn't have enough to reach a definite
conclusion, so I don't expect it to end the disagreements or the discussions
about the policy," Coss said.
Coss will travel to