Minimum Wage: Yes

Boost It! Because It’s The Right Thing To Do.

\ Oct 25, 2012

3 min read

The city’s minimum wage ordinance managed to squeak onto the ballot, so debates about it are burning bright. If passed, it’ll raise the minimum from $7.50 to $8.50 and hike the hourly wage for tipped employees incrementally to about $5 by 2014. The ordinance will also tie the minimum wage to the cost of living, while preserving breaks for employers who provide worker benefits.

Powerful interests such as the Greater Albuquerque Chamber of Commerce and the New Mexico Restaurant Association have gone head-to-head against supporters of the measure, including labor groups and New Mexico Voices for Children. Those groups argue the hike will help reduce poverty. Opponents say that it will cut the number of jobs available and hurt the city’s overall economic climate. Both sides have been lobbing statistics back and forth—many of them from studies sponsored by special-interest think tanks. The Employment Policies Institute, for instance, is an oft-cited source. But EPI is also funded by a firm that lobbies for big restaurant and retail chains.

Sorting impartial economic data from the partisan kind isn’t easy. But one of the more transparent, relevant and balanced studies we could find was conducted by UNM’s Bureau of Business and Economic Research in 2007. It looked at the impact of Santa Fe’s minimum wage—the nation’s highest—and found that employment in the City Different hasn’t really been affected. That said, the poverty rate wasn’t magically reduced either.

Another serious thing to consider is the most notable unintended consequence in Santa Fe: The higher wage dealt a big blow to organizations that give vocational training to people with disabilities. Many of them have been forced to lay off staff and cut back services. They also reported it was harder to convince employers to hire disabled people after the wage increase.

The UNM study is a little outdated, but since Santa Fe’s employment numbers remain strong compared with other New Mexico municipalities, it’s safe to say results are still applicable. Ultimately, though, Albuquerque has a very different economy than Santa Fe, and that makes direct comparisons tricky.

The worldwide recession has meant hard times for everyone. And let’s be honest: We won’t really know the true impacts of the ordinance here unless it’s passed and economists have had time to study it. But we can be confident that the doomsday scenarios business interests always forecast before minimum wage hikes simply haven’t been backed by hard evidence.

One of the opponents of the ordinance said in a Sept. 20 Albuquerque Journal op-ed, “Only 20 percent of those currently earning minimum wage in New Mexico are the breadwinners of families with children.” Remove the head-scratching “only” from that sentence, and there you have it: the best reason we could find for marking “for” on your ballot on the minimum wage increase.