NM Democrats call for 4th-highest minimum wage rate in nation

By Rob Nikolewski on February 4, 2013
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A proposal by Democrats to raise New Mexico’s minimum wage to $8.50 an hour – which would be the fourth-highest state rate in the nation – promises maximum debate in the Legislature.

Senate Bill 416 would increase the state’s minimum wage 13 percent, from the current rate of $7.50 an hour. A resolution in the House would establish the higher rate and tie it to the consumer price index, an economic measure of the change in the price of goods and services.

“I think it’s the right thing to do. It’s part of social justice,” bill sponsor Sen. Bill Soules, D-Las Cruces, said.

But with every state that borders New Mexico seeing net gains in their respective economies while New Mexico’s is still in negative territory, opponents say a raise in the minimum wage comes at the wrong time.

MINIMUM WAGE: Democratic lawmakers in New Mexico want to boost the minimum wage rate $8.50 an hour, which would be the fourth highest state rate in the nation.

“New Mexico is still in a recession,” Sen. Sue Wilson Beffort, R-Sandia Park, said. “We are going to be absorbing Obamacare, which is going to have some hefty penalties for businesses, we have layoffs that have been occurring in and around our lab contractors and other businesses. … This could push a small employer over the edge.”

Beffort, who used to own a small business specializing in personnel and temporary services, said the deal could backfire on employees. Business owners could choose layoffs or moving full-time workers to part-time to make up the costs.

Only Washington, Vermont and Oregon have state minimum wages higher than $8.50 an hour. Most of the states have minimum wage rates that equal or exceed the federal rate of $7.25 an hour. Five have no state minimum wage law, and four have rates below the federal level.

If the legislation passes, workers throughout the state will have the same $8.50 an hour that voters in Albuquerque passed in November by a nearly 2-to-1 margin.

The city of Santa Fe has a minimum wage of $10.29 an hour, and in March it is scheduled to rise to $10.51, which would displace San Francisco as the highest in the country.

Last month, the owner of a Village Inn franchise in Santa Fe told reporters he closed down the restaurant, citing the state’s minimum wage law as part of the reason.

“We didn’t want to renew the lease,” John Hoyt said. “One reason was the labor. Santa Fe is not pro-business, in my opinion. When they charge $10.29 for minimum wage — $3 over the national limit – that’s enough for us.”

Supporters of raising the minimum wage counter by pointing out that Santa Fe is one of the only communities in the state has seen positive economic growth in the past year.

Raising the minimum wage “helps economic development,” Soules said. “It’s called the multiplier in economics, where all that money that people get out of a minimum wage (increase) goes right back to the economy almost immediately.”

The measure in the House – Joint Resolution 6 – would go before New Mexico voters if – and it’s a big if – it passes both chambers and is signed Republican Gov. Susana Martinez . The resolution is sponsored by state Rep. Miguel Garcia, D-Albuquerque.

Soules’ bill has been assigned to two Senate committees and will be heard first in Senate Public Affairs. It does not require a public vote.

With little more than five weeks left in the session, does it have enough time to pass?

“I’m a new freshman senator,” Soules said. “I really don’t know the timeframes and how fast things move and don’t move. I hope that it does and moves relatively quickly.”

The state’s minimum wage was last changed in 2009.

Here’s a video we shot of Soules and Beffort debating the issue. It runs a little more than 5 minutes:

Posted under Capitol Report.
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One Comment For This Post So Far

  1. Morgan
    3:42 pm on February 10th, 2013

    This “layoffs or moving full-time workers to part-time to make up the costs” is so much garbage. No competent business hires unneeded employees to work unneeded hours so the business was poorly managed to begin with and minimum wage just servers as a scapegoat for the bungling of the owner-operator.

    Studies by Card and Krueger (1992); Katz and Krueger (1992); Dube, Lester, and Reich (2010, 2011) by Berkeley and Harvard ALL show the same thing–raising the minimum wage statistically IMPROVES the economy EVEN IN A RECESSION. Furthermore shows same studies show NO PROOF of the claim that raising the minimum wage cost jobs.

    The people have woken up to the cry wolf of minimum wage cost job claim and they are sick of it. Scholars have shown the claim to be bogus with NO basis in reality so give it a rest.

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