Santa Fe sports the highest minimum wage in the country — $9.85 an hour.
Santa Fe city councilors, who mandate the pay rate, call this a “living wage.”
One local businesswoman argues that the living wage is fair, while one businessman says the phrase “living wage” is a misnomer that lacks incentives to improve yourself.
“It misleads youngsters (into thinking) that you can make a living by making $9.85 an hour,” said Al Lucero, owner of Maria’s New Mexican Kitchen. “It takes away incentive. They don’t try to improve.
In addition to the city having the highest minimum wage in America, councilors revised the ordinance in 2007 to tie wage increases to inflation as calculated by the consumer price index.
Lucero said he does not oppose a minimum wage or people making a good living. But the city should keep its so-called “living wage” at $9.85 an hour, eliminate the yearly cost-of-living increases and let employers determine increases based on merit, he said.
Some businesses have refused to move to Santa Fe because of the wage, he said.
Councilor Matthew Ortiz, one of the original co-sponsors of the living wage ordinance, said “the sky didn’t fall,” as Lucero predicted at the time.
For example, businesses did not close down, Ortiz said.
As evidence, the University of New Mexico studied the effect of the living wage when it was set at $8.50 and again when it rose to $9.50 per hour. UNM researchers found no measurable changes in business start-ups, business closings, unemployment or the rate of job creation.
Mayor David Coss defends his sponsorship of the living wage because, “I believe persons who work for wages deserve the dignity of earning enough to not live in poverty. I further believe that by requiring pay increases for thousands of low wage workers in Santa Fe, we helped not just those workers but the Santa Fe economy because these workers are most likely to spend their money in Santa Fe.”
But there are other issues with the living wage, Lucero said. He maintains that it discourages some business people from hiring high school youths when they can hire someone with more experience.
“It’s increased our payroll by hundreds of thousands of dollars,” Lucero said.
He used to reward top employees by giving them overtime. But the overtime rate is about $15 an hour, making that incentive much harder on him.
Lucero said that when he started working, he made minimum wage, and “it was the best incentive for me to get an education and improve.”
In November 2007, the city expanded its living wage ordinance to include businesses with fewer than 25 employees. Interns earning college credit are the only types of workers exempt from the living wage law.
The ordinance itself gives numerous facts to support its existence.
According to the ordinance, the average wage per job in Santa Fe County is 23 percent below the national average, and the cost of living is 18 percent higher than the national average.
According to the New Mexico Department of Labor, 23.5 percent of Santa Feans who are employed in the non-governmental sector earn hourly wages of $10.50 per hour or less.
When the living wage ordinance was first passed in 2003, it required employers of 25 or more workers to pay at least $8.50 an hour, starting Jan. 1, 2004.
Included in that wage were employees who made more than $100 a month in tips and the value of employer-provided health benefits as well as child care.
The ordinance was challenged in court, but the businesses lost their appeal and started working with the mayor and the nonprofit Living Wage Network on a solution.
Dia Winograd, a Santa Fe real estate agent, spoke out at a City Council meeting about two years ago, saying she favored extending the “living wage” to businesses that employ fewer than 25 people.
Even today, Winograd favors Santa Fe’s “living wage” because it is fair.
“I am proud to live where that old-fashioned concept is alive and well,” Winograd said.
Ortiz said that was the council’s intent.
“It was the right thing to do,” he said, “because we needed to do something about the state of people who were at the lower levels of pay scales.”
Winograd can see why some people oppose the law. Still, “... for the majority of workers at that end of the pay scale, living wage is essential,” she said.
Can anyone live on less than $10 an hour?
Winograd responded with her own questions: “How many hours does one have to work to live on less than that? How does it affect me personally to live in a town where the working poor have no hope of earning enough for the basic necessities?”
Obviously, before the living wage was enacted, some people in Santa Fe worked for less than $9.85 an hour.
“When one has no choice, they do what is necessary, which often means having two or three jobs,” she said.
The living wage forces some business people to change how they operate. Rob Day, owner of Santa Fe Bar and Grill, lists a few things he has had to change:
¦ Cut back staff, specifically bus staff and cooks.
¦ Cut most summer and holiday student employees.
¦ While seeing an increase in the cost-of-living wage, Day’s more experienced employees are not receiving the incremental wage increases they saw before the additional costs of the living wage.
“The recession has further compounded the problem,” Day said. “I feel fortunate to have the experience and established business profile that helps me keep my doors open. Less-experienced or established service providers are finding no or little traction in this market. They are the real casualties in this creative social experiment.”
Contact Brad Buck at (505) 629-4408 or
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