Serving the High Plains
Serving the High Plains
This will be the year in which New Mexico’s minimum wage will go up, probably dramatically. The Democrats will make sure of that.
Moreover, this year’s legislative session is an opportunity to put this perennial issue to rest for good — by tying it to inflation.
Politics, not smart regulations, have gotten us to where we are now. Because of political pendulum swings between Democratic and Republican control, when the minimum wage is raised, and by how much, depends on who’s in power; the Republicans typically oppose minimum wage increases, while Democrats typically support them. The result has been sporadic increases that can be a financial shock to employers operating on tight margins.
Going from $7.50 to $10 an hour — as Gov. Michelle Lujan Grisham has proposed — is a big increase for any employer, but it’s especially tough on mom-and-pop businesses that are scraping by with paper-thin profit margins. Such a dramatic increase wouldn’t be necessary if the state had its minimum wage tied to the rate of inflation.
Such an approach has been proposed before. In 2014, state Sen. Richard Martinez, D-Española, sponsored a joint resolution that would have placed the issue before the state’s voters as a constitutional amendment. Martinez sought to tie the state’s minimum wage to the annual rate of inflation, up to 4 percent each year, based also on cost-of-living increases.
At that time, Martinez’s proposal would have raised the minimum wage from $7.50 to $8.30 an hour, similar to the rate of inflation between 2009 (the last time New Mexico raised its minimum wage) and 2014 (when the legislation was proposed), then tie it to inflation and cost-of-living indicators annually after that.
When Sen. Martinez proposed the measure, Republican Gov. Susana Martinez was in office and she didn’t support any sort of minimum wage increase. Now, Lujan Grisham is governor and she made it a campaign promise to raise the state minimum wage. It’s coming.
And tying future increases to inflation is a real possibility this session. House Bill 31 would increase the minimum wage to $10 in July, to $11 next year and to $12 in 2021 — then tie subsequent increases to the Consumer Price Index for Urban Consumers (CPI-U). And HB 46 would increase the minimum wage to $15, beginning Jan. 1 of next year, and then link future increases to the CPI-U.
What’s more, both bills would also do away with having a separate minimum wage for tipped employees, which is another contentious issue in the minimum-wage debate.
At least eight other states have tied their minimum wage to inflation or cost of living indicators. Oregon has been doing it since 2002 and it has one of the strongest economies in the nation (11th as of last year). Any argument that this would hurt our state economy is bogus.
What could hurt New Mexico’s economy, of course, is in the amount of this year’s increase. As I mentioned, from $7.50 to $10 will be a big hit for a lot of businesses, but that pales in comparison to the proposed $15 increase. Too much of a wage hike would send some mom-and-pop businesses belly up.
Tom McDonald is editor of the New Mexico Community News Exchange. Contact him at: