NM Street Press
Wage Increase Ballot Measure Sinks in Committee
State legislature opts for more jobs, more poverty
Every few months, a new report is released detailing just how pitifully New Mexico ranks when it comes to quality of life measures such as childhood hunger and homelessness. Last week New Mexico lawmakers rejected legislation that its supporters say could have helped improve those dismal rankings through mandatory minimum wage increases.
The state House voted 33 for and 29 against putting a measure on the ballot to increase the state's minimum wage to adjust for inflation. Since this legislation would have changed the New Mexico Constitution, it required “for” votes from the majority of all 70 elected house members—or 36 votes.
Amendment supporter and House Speaker W. Ken Martinez (D-Grants) said he was disappointed that all house members didn't see the need to participate in such an important vote.
“From where I sit, I can see the chambers pretty good. Some members were in the chambers but didn't vote, which was a little troubling because the number one duty of any member is to vote,” Martinez said.
If it had passed, the law would have called for a one-time wage increase of about 80 cents per hour to $8.30, based on inflation increases from 2009 to 2014. After that initial increase, the minimum wage would rise yearly to keep pace with the Consumer Price Index, one of the nation's leading measurements of inflation.
Martinez said an increase is long overdue, and the Democratic caucus would work tirelessly until minimum wage legislation becomes a reality. “For us not to have touched it over so many years … Honestly it's not justice,” he said, “to not have increased the minimum wage so that minimum wage workers are able to receive something close to a living wage.”
Amendment supporter and House Speaker W. Ken Martinez (D-Grants) said, “From where I sit, I can see the chambers pretty good. Some members were in the chambers but didn't vote, which was a little troubling because the number one duty of any member is to vote."
Opponents of increasing the minimum wage inevitably point to basic economic principles of supply and demand. Say a business owner has 100 employees who are being paid at New Mexico's current state minimum of $7.50 an hour.
If their wages are raised to the state's projected $8.30 an hour, the employer's labor costs would rise 11 percent. That's an increase many business owners may have problems adjusting to, said Paul Gessing, president of conservative think tank the Rio Grande Foundation.
Gessing, a staunch foe of artificial wage increases, asserts that it would likely be difficult for the owner to swallow such an increase without either raising prices—which would make the business less competitive—or laying off workers.
"Most advocates for a higher minimum wage seem unwilling to even acknowledge this trade-off,” Gessing said. "Possibly, that is because support for higher minimum wages drops in polling once you explain to people that it could reduce the number of jobs."
But Martinez said that did not occur in Santa Fe, where a $10.29 minimum wage took effect in March 2013.
“That hasn't been the experience so far; if you look at the city of Santa Fe, it didn't appear to kill any jobs,” Martinez said. “What it has done was give people more money to buy products and services, and when people have more money to consume with, it helps the economy.”
Earlier this month the Congressional Budget Office released a report stating that Obama's proposed plan to increase the federal minimum wage to $10.10 an hour would result in less poverty but more unemployment. If Obama's $10.10 wage increase took effect, that same employer would have to incur a whopping 25 percent increase from the current $7.50.
Paul Gessing says he doesn't always agree with the Congressional Budget Office's figures, but their recent posting on Obama's proposal sounds about right to him. The CBO estimates the proposal would lift about 900,000 people above the poverty line, but it would also likely result in 500,000 fewer jobs.
As for improving New Mexico's dismal economic rankings, Gessing says raising the minimum wage would have the opposite effect. “If Obama and New Mexico's legislators wish to raise wages,” Gessing said, “they need to do a better job of creating the economic conditions that allow for economic prosperity. New Mexico in particular is poor, and the economy is performing poorly. Raising New Mexico's minimum wage further above the federal level will have an especially negative impact.”
Since its last increase in 2009, a Pew Research Center report states that the federal minimum wage has lost about 5.86 percent of its purchasing power to inflation. New Mexico hasn't done much better. Conversely a 2009 Voices for Children fiscal policy project report concludes that nearly 6 percent of the state's minimum wage dollars are burned up by inflation.