A proposal to increase the minimum wage in Albuquerque to $7.50 per hour and the hourly wages of tipped employees to $4.50 will appear on the Oct. 4 municipal ballot. Proponents say this measure could lift some 30,000 to 40,000 people in our city out of poverty and that passage of the law is a moral and economic imperative.
The most vocal opponents of the proposal counter that, if enacted, the ordinance would be a gross infringement on private property rights. Thus far, they have been eerily silent about the economic effects.
As has been typical of political discourse since ancient times, the core issues surrounding the measure have been muddied by diversionary rhetoric of a kind that should be all too familiar to most Americans.
Congress last raised the federal minimum wage eight years ago. According to the Economic Policy Institute, a liberal think tank, an estimated 7.3 million workers, 5.8 percent of the workforce, would benefit from an increase in the minimum wage. More than one-third of them are parents of children under 18, including 760,000 single mothers. The minimum wage of $5.15 an hour is worth just 33 percent of the average hourly wage of an American worker, and that is its lowest level since 1949.
Furthermore, the inflation-adjusted value of the minimum wage of $5.15 an hour was 26 percent lower in 2004 than it was in 1979. Adjusted for inflation, $5.15 today is equivalent to only $4.23 in 1995. Almost 61 percent of low-wage workers are women. Almost 44 percent of low-wage earners work full-time; another 34.5 percent work between 20 and 34 hours per week. A full-time worker earning $5.15 an hour would earn $10,712 a year, well below the 2003 federal poverty line of $14,824 per year for a family of three.
Since the federal government last increased the minimum wage in 1997, members of Congress have given themselves $23,000 each in raises.
City Councilor Martin Heinrich, whose proposal to raise the minimum wage to $7.15 per hour failed earlier this year, said House Majority leader Tom DeLay (R-Texas) is fond of calling the congressional pay hikes "cost-of-living increases." But the Consumer Price Index has gone up 22 percent since 1997, Heinrich noted. "Where are the cost-of-living increases for the minimum wage workers?"
When Santa Fe increased its minimum wage to $8.50 per hour in 2004, the argument was made that it was going to cost the city jobs. But, according to Heinrich, "That simply never occurred." The last six months of 2004 saw Santa Fe gain 200 new jobs in the retail sector and 400 new jobs in food service and drinking establishments. "The very sector of the economy that worked the hardest to kill the Santa Fe law benefited the most from the new minimum wage," Heinrich said. Why? Because, he reasons, low-wage workers are going to spend the extra money, giving the economy a boost.
The councilor also points to the decrease in public assistance that resulted with the living wage law. Heinrich met many low-wage workers at the "big-box" retailers when he was drafting his ordinance. "It was utterly clear that there was no way they could not be on public assistance." The kinds of welfare for which minimum wage workers are eligible include food stamps, housing vouchers, medical coverage and cash assistance under the Temporary Assistance to Needy Families (TANF) program. Over the last six months of 2004 there was a 4.9 percent decrease in Santa Fe's TANF caseload, whereas the rest of the state saw a 4.5 percent increase in cash assistance cases.
In short, Heinrich believes "big-box" employers are drawing down welfare themselves. When employers pay too little for workers to meet food, housing and health care basics, "You end up subsidizing the labor costs of those low-wage employers," Heinrich said. "The government is actually picking up the tab for a significant portion of the labor force."
"We do believe that higher wages are better for everyone," said John Salazar, chairman of the Albuquerque Hispano Chamber of Commerce. "But they should come about by increased economic activity rather than by government edict." Salazar said his organization believes that the minimum wage is a matter for federal legislation and that it is unfortunate to have "a patchwork of different minimum wages in different communities."
Higher-paying businesses and industries will be more reluctant to locate in Albuquerque if they see local government regulating wages, Salazar argues. Why wouldn't the city later impose other regulations, such as what kind of health insurance a business must purchase for its employees? "Then we become perceived as an anti-business jurisdiction. And that's the last thing we want. We want higher-wage industries to come to New Mexico, but we believe we can do that better by providing a business-friendly work environment."
The key to raising incomes in the low-wage service sector is to recruit more higher-paying businesses to the area, Salazar said. Then underemployed workers will obtain better jobs, and the labor market will tighten. "With a small pool of labor, the service industries will have to pay more for the workers who are left to do service," Salazar said, adding a cliché popularized by President Ronald Reagan, "A rising tide raises all ships."
Furthermore, one local restauranteur, who wished to remain anonymous, was supportive of the general idea of raising the minimum wage but felt the current proposal, as applied to tipped employees, didn't make sense. "Our servers are already making $12 to $14 an hour on average," he said. "If this law passes, they'll be making $14 to $16, which is actually more than our managers."
He added that he's crunched the numbers, and the ordinance will cost his restaurant thousands of dollars. He said he won't have any alternative but to lay people off and raise their prices.
It doesn't take much of a stretch to imagine what low-income workers think of the proposed living wage ordinance. If they could, they might even vote to increase their pay as frequently as the U.S. Congress.
"Of course I'm in favor of it!" said K.S., a clerk at a Northeast Heights Phillips 66 convenience store who declined to give her full name. "How can people live on $5.15 an hour? I think that's absolutely outrageous. Why should you work hard for $5.15 an hour? You can't support yourself, let alone a family."
K.S. said she earns more than both the current minimum and the proposed $7.50 per hour and was adamant that she would not work for the minimum—unless she was "desperate" or "on the streets." She believes a higher minimum will help employers by reducing employee turnover. But she also thinks that, if passed, the proposed law, which exempts small businesses with 10 or fewer employees, will prompt some employers to cut back on workers to avoid paying a higher minimum wage.
Courtney Fisher, 22, is a manager at Petco, which she describes as "an awesome company." Asked whether she'd heard that a living wage ordinance was up for public referendum on Oct. 4, she said she'd heard about it, but didn't realize it was on the ballot. "I think it's about time. We're due. I mean, $5.15 is a little ridiculous if you ask me. Making even $10 an hour isn't enough." When she started at Petco two years ago, Fisher got $7.25 per hour and she said Petco believes in paying its employees well. "It's not fair to make prices keep going up [while] wages stay the same."
Maria Helena, who works at the Family Dollar on Gibson SE, did not know about the living wage referendum, but brightened up when told the new minimum wage would be $7.50 if the proposal passed. Helena earns $6.15 an hour and has been at the discount retailer for two years. Before that, she worked at Target for four years, also at $6.15 an hour. She counts herself lucky. She lives with her sister, who makes $6 an hour, and her parents, both of whom make $6.75 an hour cleaning offices. The family owns their home and don't receive any public assistance, but they do help support Helena's grandmother, brother and younger sister who live in Cuba. Twice a month the family pays $26 to send $100 to Cuba. "It's wonderful," Helena said, still smiling about the potential windfall.
When asked how it felt to be making the same $6.15 wage for 6 years, Helena demurred. Surely, things could be worse. "In Cuba, no one is happy," she said. "No hay nada. No food. No dress. Nada."
For City Councilor and mayoral candidate Eric Griego, raising the minimum wage is a moral imperative. He is the only candidate in the race that supports the ballot initiative.
On Labor Day, before waiting tables at Aunt Babe's restaurant to call attention to the plight of minimum wage workers, Griego called the living wage referendum "bigger than the mayor's race." At a Sept. 6 comedy benefit to raise money for the Albuquerque Living Wage Campaign, Griego took a break from the political barbs and musical satire that kept an audience of 100 living wage supporters laughing. He spoke about growing up Catholic. He said he believes in social justice.
Later, in a phone interview, Griego spoke of the importance of paying workers a fair wage for a fair day's labor. "We're not going to deregulate and make our city the low-wage capital of North America. Our competition is not third world cities. Our competition should be Boston or Austin."
Griego said the $7.50 living wage will lift 40,000 people out of poverty in Albuquerque. Griego, who studied economics in college and worked for four years at the U.S. Labor Department, said 72 cities across the country have adopted living wage ordinances, and he hasn't seen a single study that shows raising the minimum wage is detrimental to an economy. He concedes there might be a slight inflationary effect. For instance, people may have to pay 50 cents more for a Big Mac.
"But the net effect on the economy is more people would be lifted out of poverty," Griego said. And that means lower school dropout rates, lower crime rates, lower incarceration rates and lower teen pregnancy rates, all of which correlate with poverty. "So if you wanted to come up with one policy that would address all those issues, you would want to come up with a policy to lift people out of poverty."
Asked his opinion on the minimum wage debate, Sherman McCorkle, cochair of the Coalition to Expose Ballot Deception, said, "We do not believe that this ordinance is about the minimum wage." He went on to say the ordinance "appears to be subterfuge for access to the workplace." He added: "The reason the coalition exists is to preserve the property rights of all Americans." Here's where the art of the spin comes in. On the surface, McCorkle's former opinion sounds like a classic example of a red herring and the latter perfectly fits the definition of the argumentum ad populum fallacy (see "Spin This" sidebar).
At the center of this ostensible controversy about the living wage ordinance is the inclusion of a single sentence: "Every employer shall allow any member of the public access to nonwork areas of the employer's business that are otherwise open to the public or customers generally, such as parking lots, sidewalks and pedestrian areas, to inform Employees of their rights under this and other laws."
The ordinance also gives the City Attorney's office authority to implement and enforce the ordinance, and to develop rules and guidelines for that purpose, including rules governing how the educational access provision of the law is to be carried out.
Matthew Henderson, head organizer for ACORN, the Association of Community Organizations for Reform Now, which is spearheading the drive for a living wage here, said the language used in the ordinance already exists in National Labor Relations Board (NLRB) case law. "There's nothing to stop you from saying to a cashier, ’Hey, I hope you're earning more than $5.15 an hour. Do you know what the new minimum wage is?'" On the other hand, Henderson said, "An employer has the right to kick you off their property if you're disrupting their business. This ordinance doesn't change any of that."
Maureen Sanders is a labor law attorney and co-legal director of the New Mexico branch of the American Civil Liberties Union. She said the educational provision of the law is designed to ensure that low-income workers actually receive the pay the ordinance allows for. Advocacy groups for immigrants, for instance, would have the right to talk to workers about their right to the new minimum wage.
"Nonwork" areas is a term employed by the NLRB to strike a balance between unions who have the right of access to private sector business sites to inform workers of their rights to organize under national labor law, and businesses who have the right to keep their operations functioning without disruption, Sanders said. Nonwork areas are defined as sidewalks, public pedestrian areas, parking lots or, in some instances, employee cafeterias. Under this ordinance, the city has the power to specify further regulations governing access to businesses.
The ordinance would not sanction members of the public talking to employees on private business property about any law whatsoever. "The courts always look at intent," Sanders said about how the law might be interpreted in the event of a civil suit. "And the whole purpose of this legislation is work-related rights."
When Heinrich was negotiating with the business community to garner support for his version of the living wage bill, he struck the same educational access clause from the bill. The Greater Albuquerque Chamber of Commerce (GACC) had the chance to support minimum-wage legislation without the offending clause, Heinrich said. "Their opposition is really just to paying a fair minimum wage." Heinrich believes the Chamber of Commerce decided to take a different tack once they realized that 60 percent of Albuquerque's population supported a living wage law.
Terri Cole, president of GACC, declined to be interviewed. She did release a brief statement via e-mail regarding the Chamber's opinion about the minimum wage itself: The Chamber believes it is a federal matter.
The Coalition to Expose Ballot Deception has raised more than $90,000 to fight the living wage ordinance. It has also set up an alarmist website complete with alarmist graphics and alarmist catchphrases. "The so-called ’Living Wage' is only bait," it says on stopthedeception.com under a photograph of a mousetrap with a dollar bill presented as bait. "Don't get caught in the trap." Until last week, the website didn't even indicate in any obvious way that the coalition objects to the section designed to ensure that workers know that the ordinance exists.
On this issue, Mayor Martin Chavez has decided to play the spin game as well. During last week's televised mayoral debate on KOB Channel 4, Chavez stated the ordinance makes it so that "people can come in and go through records in the workplace without invitation or permission."
It's true that one section of the proposed ordinance gives the city attorney access to employment records "with appropriate notice and at a mutually agreeable time," but this would only be in the case of an employer's alleged noncompliance with the new law. In other words, based on the plain language of the proposed ordinance, the mayor's assertion seems to be patently untrue.
When contacted by the Alibi, Joanie Griffin, the mayor's campaign press secretary, said the mayor isn't the one spreading misinformation about the initiative, yet neglected to explain further.
"It really is a red herring," Griego said. "There's just no intellectual honesty going on in this whole debate." He was particularly miffed by the idea that GACC, whose mantra is usually "local control," wants to wait for the federal government to take action on the minimum wage. "Suddenly, they're the champions of federal prerogative."
The Chamber of Commerce's real champions are the business and media elites, charges Griego.
"It's not some kind of welfare payment," Griego said. "It's telling people we're going to pay you more for work. I'm going to fight to pass this with all my heart. I believe in my heart that it's the right thing to do."