Studies differ on effects of ordinance on unemployment

By Bob Quick The New Mexican

Two studies tell conflicting stories about the impact of Santa Fe’s minimum-wage ordinance on the city job market.
    While a recent study by Aaron Yelowitz, a professor at the University of Kentucky, indicates the wage resulted in a .69 percent increase in the unemployment rate since last May, information from the state Labor Market Review for May indicates that the local economy created 1,200 jobs. That’s a growth rate of 2 percent.
    The same Labor Market Review also shows that six of 12 industries are “making gains” in jobs, while four remained the same. Two industries lost jobs.
    Another professor, Robert Pollin from the University of Massachusetts-Amherst, disputed Yelowitz’s findings. “I’m not too confident in his mode of analysis given his performance at the trial” in Santa Fe, Pollin said. “The judge basically dismissed it.”
Yelowitz and Pollin served as expert witnesses at the state District Court trial of the minimum-wage ordinance in 2004. District Judge Daniel Sanchez found in favor of the ordinance, which went into effect following the trial.
Pollin was in Albuquerque on Monday to take part in a news conference at The University of New Mexico’s Economics Department dealing with the upcoming vote on Albuquerque’s living-wage ordinance. Albuquerque’s proposed minimum wage would be $7.50 an hour.
    The Yelowitz study, using U.S. government data, found that the minimum wage in Santa Fe, now $8.50 an hour and due to rise to $9.50 on Jan. 1, increased the city’s unemployment rate. Yelowitz stated in his study that if the ordinance had not been passed, unemployment would have been at 3.9 percent in May 2005, less than one year prior, when it was 4.6 percent.
Yelowitz also estimated that the city’s minimum wage “destroyed” 539 jobs in Santa Fe.
Pollin said it is his understanding that there has been a 3 percent job growth in Santa Fe’s hotel and restaurant employment.
    “The job-growth rate has lagged in general” throughout the United States, he said.
Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.com