After recent minimum wage increases in Santa Fe and Albuquerque, State Sen. Richard Martinez, D-Los Alamos, proposes, with Senate Bill 416, to make the state minimum wage $8.50 per hour. State Rep. Miguel Garcia, D-Bernalillo, wants cost-of-living increases.
House Joint Resolution 6, introduced by Garcia, narrowly passed last week in the House Labor and Human Resources committee and on the house floor. Most or all Republican state representatives opposed tying the state minimum wage to inflation.
President Barack Obama, in his State of the Union speech last night, called for raising the federal minimum wage to $9 per hour. This would amount to an increase of $1.75 per hour for workers earning the federal minimum wage.
“Even with the tax relief we’ve put in place,” Obama said, “a family with two kids that earns the minimum wage still lives below the poverty line.” “No one who works full-time should have to live in poverty,” he said.
The federal minimum wage has not kept pace with inflation. The federal minimum wage guaranteed workers at least $1.60 per hour in 1968. The CPI Inflation Calculator, from the Bureau of Labor Statistics, says this represents $10.56 in 2012 dollars.
“Let’s tie the minimum wage to the cost of living,” Obama said, “so that it finally becomes a wage you can live on.”
From 1997 to 2007, the federal minimum wage stayed at $5.15 per hour. Between 2007 and 2009, Congress allowed states to set rates that exceeded the federal minimum wage. The federal minimum wage reached $7.25 per hour in 2009.
The New Mexico legislature pursued this opportunity and set a statewide minimum wage of $7.50 per hour, which took effect in January 2009. This statewide minimum wage, still in effect, exceeds the current federal minimum wage by $0.25 per hour.
Santa Fe increased its minimum wage by $3.35 in June 2004. The city council tied subsequent rates to cost of living increases. The Albuquerque city council increased its local minimum wage by $1.60, which took effect in January 2007.
Last November, voters in Albuquerque, by a 2-1 margin, approved another raise in the city’s minimum wage, from the state minimum wage to $8.50 per hour. Starting in 2014, Albuquerque will tie future increases in its minimum wage to inflation.
“There’s no credible evidence that a minimum wage increase in New Mexico will create jobs, and plenty of evidence that it will do the opposite,” said Paul Gessing, President of the Rio Grande Foundation, in a press release last week.
Santa Fe’s minimum wage will increase to $10.51 on March 1, the second-highest in the nation. Republican legislators, who generally oppose higher minimum wages, may point to Obama’s proposal and argue against state bills, according to New Mexico Telegram.
In 2007 the Bureau of Business and Economic Research evaluated the economic impact of Santa Fe’s “living wage.” BBER found that Santa Fe’s unemployment rate declined. However, other measures, including the local poverty rate, remained mixed or unchanged.
At the end of 2012, according to the Bureau of Labor Statistics, the Santa Fe unemployment rate increased a bit to 5.1 percent. The unemployment rate in Albuquerque ticked up slightly to 6.7 percent. The national unemployment rate remained unchanged at 7.8 percent.
Census data from the last several years indicate Santa Fe’s substantial raise in its minimum wage had a modest, yet positive, economic impact on residents and students. Albuquerque’s smaller, one-time, minimum wage hike yielded fewer benefits for workers and youth.
The percentage of Santa Fe residents, 16 years and over, in the labor force increased, from 66.8% in 2000 to 67.2% in 2011, according to the Census Bureau. The labor force participation rate in Albuquerque fell, from 66.2% to 65.5%.
U.S. Sen. Martin Heinrich, D-New Mexico, while a city councilor in 2006, spearheaded the effort to raise Albuquerque’s minimum wage. “What kind of city expects people to work two or three jobs, but still live in poverty?” he asked.
According to the Census Bureau, the proportion of Santa Fe workers living in poverty decreased, from 11.5% in 2005 to 8.8 percent in 2011. The poverty rate for Albuquerque workers increased, over those years, from 7.5% to 9.6 percent.
Dr. Aaron Yelowitz, an economist at the University of Kentucky, published two reports in 2005 that analyzed Santa Fe’s relatively-new living wage. He said it increased the chances of unemployment for less-educated employees by 8.3% and cut their work hours.
The Census Bureau found Santa Fe residents, ages 18 to 24, not enrolled in college fell, from 64% in 2005 to 53% in 2011. The percentage of youth attending college increased in Albuquerque as well, though not by as much.
The House Voters & Elections Committee will discuss HJR 6 tomorrow morning. If approved, it will move to the house floor. SB 416 has not yet appeared on the schedules for the Senate Public Affairs and Corporations & Transportation committees.