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By BOB QUICK | The New Mexican
September 14, 2007
Report finds single pitfall
from law in analysis of economy
A ``preliminary analysis'' of data on the impact of Santa
Fe's $9.50-an-hour minimum wage shows the city's
economy ``has generally been performing well'' since it went into effect.
The information, released by the city late Friday afternoon, comes from
a study by the Bureau of Business and Economic Research at The University
of New Mexico that was mandated by the Living Wage ordinance.
But one local restaurateur who has long opposed the mandated minimum
wage, Robbie Day, owner of the Santa Fe Bar and Grill at DeVargas Center and the San Francisco Street Bar and
Grill in downtown Santa Fe, criticized the study.
``I think the economy is falling apart,'' he said. ``Downtown people are
going out of business right and left.'' The economic research bureau, Day
said, ``was hired by the city, and the city is paying them. The report
gives the city what it wants to hear.''
Lee Reynis, the bureau's director, was not
available for comment Friday.
The findings of the study state the higher wage has had a positive
effect on the local economy with one major exception.
The report states the minimum wage ``has had a major (negative) impact
on organizations providing vocational services to people with disabilities
in terms of the capability to place people with disabilities in jobs.''
Representatives of two unnamed Santa Fe
nonprofits interviewed for the study said the higher wage had ``created a
situation which required the reduction and elimination of program
offerings,'' the study said.
Among the study's positive findings are:
- The unemployment rate has
fallen since the minimum wage went into effect.
- The minimum wage is not a
significant factor in determining whether a company hires or fires
employees.
- The minimum wage has not
caused a drop in investment in Santa Fe.
- Since the wage went into
effect, the city's year-over-year taxable gross receipts have risen
each quarter.
- The city's lodgers' tax
growth has been ``relatively strong'' since the first quarter of 2006.
The minimum wage is scheduled to increase to $10.50 an hour in 2008, but
a proposal is on the table to keep it at $9.50 until 2009, when an annual
cost-of-living increase would kick in and coverage would be expanded to all
employers regardless of size.
The mayor, six city councilors and business groups back the bill, which
will be considered by the city's Business and Quality of Life Committee on
Sept. 25 and the Finance Committee on Oct. 1. It then will go to the City
Council for consideration.
Day disagreed with the bill, saying the $9.50 wage is an imposition that
will make it impossible for businesses to make a profit.
``I've been running a business downtown, and I haven't made any money on
it in 31/2 years,'' he said. ``This whole idea of putting a cost-of-living
increase in place is unrealistic to me.''
The expansion of the mandatory minimum wage has irked some small-business
owners, who say it is inflationary, interferes with private business
operations and encourages high-school students to drop out to go to work.
``It makes it very difficult to live in the area,'' construction company
owner Paul Caron has said. ``I used to live in Aspen,
(Colo.), and I know if you
continue (raising wages), you'll get to a point where everybody is
suffering.''
In the study, the Bureau of Business and Economic Research said it was
``unable to substantiate concerns that the living wage provides a powerful
incentive for students to drop out of school.''
The bureau is encouraging local businesses, employees and residents to
comment on the impact of the minimum wage for the second part of its study,
which focuses on community views of the measure.
Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.
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