SANTA FE: For the Martinez family, this state capital's new
$9.50-an-hour minimum wage - the nation's highest - has been
a blessing and a curse.
Housekeeper Di Martinez, 24, is making about $160 more a month.
That has helped her contribute more to the $780 rent on a two-bedroom,
650-square-foot house she shares with four friends and her brother,
Marcelo.
Yet dishwasher Marcelo Martinez's take-home pay hasn't gone
up at all. In some weeks, it has actually dropped after his
boss cut back on offering overtime because of the higher hourly
pay.
Four months after the new wage took effect, it's too soon
to know the long-term impact on this city of 68,000, built largely
on state government and tourism. Popular with celebrities and
well-heeled art lovers, Santa Fe is an expensive place to live.
The median home price for the last quarter of 2005 was $470,000,
more than double the U.S. median of $213,000.
The city's minimum wage is scheduled to rise to $10.50 an
hour in 2008, pending another vote by a City Council that overwhelmingly
supported the increase to $9.50. The federal and New Mexico
minimum wages are both $5.15.
Santa Fe's wage covers all businesses with 25 or more employees.
The city has had the USA's highest minimum wage since pegging
the rate at $8.50 an hour in July 2004. Newly elected Mayor
David Coss, who as a City Council member pushed the measure
through, says the latest increase has had little effect on businesses
here.
"There's been no real negative impact that we've seen," Coss
says. "About 9,000 working families here got a raise. We had
about the same job growth with the minimum wage as before. Santa
Fe usually outperforms the rest of the state in job growth,
and we still do."
Healthy job growth
A University of New Mexico study released in late 2005 shows
Santa Fe job growth was 3.5% in the first year of the $8.50
wage, ahead of the 2.1% growth for the state.
Opponents of the higher wage say the impact has been slight
because almost all workers here earn well above the federal
minimum. The de facto wage floor has been about $7.50 because
of the high cost of living in Santa Fe, so bumping it to $8.50
was easy to absorb, says Simon Brackley, interim president of
the Chamber of Commerce. The chamber sued to block the $8.50
wage but chose not to appeal in mid-2004 when a judge upheld
it.
"A lot of our concerns were not about whether an individual
business can afford to pay a little bit more. It's the unintended
consequences," Brackley says. "If you pay $9.50 an hour to someone
who just walked in off the street, then someone else who's been
working there for a couple of years, who has been gaining skills
and proving loyalty, should automatically get more because they're
worth more to the business."
Some business owners suggest that the $10.50 wage planned
for 2008 should be partly based on experience.
"I don't think that's what a teenager at his first job should
be paid or someone that we're training," says Sarah Wilhelm,
owner of the Aztec Cafe. She starts workers at $7.50 an hour
because, as a business with fewer than 25 employees, she's not
governed by the $9.50 law.
Al Lucero, who owns Maria's restaurant and opposed the higher
wage, says the increase has prompted him to cut back on overtime
to save money.
Lucero says he's mainly concerned that the high minimum wage
will dissuade businesses from coming to Santa Fe and prompt
them to choose less expensive places to operate, such as Albuquerque
or Las Cruces.
"I'm not opposed to a minimum wage, but I believe it ought
to be applied equally, that it should be done by the state or
the federal government, not city to city," he says.
Some business owners say Santa Fe's distinction of offering
the highest minimum wage is a badge of honor.
"Santa Fe has always had the reputation for attracting free
thinkers and progressives," says Larry Keller, owner of Design
Warehouse, a furniture store where he pays starting employees
$14 an hour. "If it can work here, why couldn't it work in Oklahoma
City?"
Better than before?
Keller says $10.50 is "the compromise because business people
for the most part feel they can afford to pay it, that it's
not going to jeopardize the bottom line. It's the beginning
of some kind of wage that (workers) can pay the rent, put food
on the tables (with). I'm not sure $9.50 gets you paying a $100,000
mortgage or owning your own home, but it's a lot better than
before."
At the Martinez home, that's questionable. "I don't really
think it's made that much of a difference, except to the politicians,"
Di Martinez says. "We had this much before, now we have that
much. But that much isn't a whole lot, anyway, you know?"
For Ivan Cornejo, 18, the new wage has been a big help. The
Santa Fe Community College freshman received an immediate raise
at his part-time job as a store cashier and has since moved
on to work as a teller at a local bank branch, where he gets
more hours. Between the new wage and the additional hours, his
take-home pay has jumped from $125 to $360 a week. He now gives
his parents, with whom he lives in a three-bedroom home, $250
a month toward rent and food.
"It's been a big change for me and most people I know," Cornejo
says. "Now I can buy movies instead of renting. I can buy books
instead of getting them from the library."
