Study: Minimum-wage law hasn't hurt job growth
By HENRY M. LOPEZ | The New Mexican
August 10, 2006
Santa Fe's minimum-wage ordinance hasn't affected overall employment levels in the city, a University of New Mexico study has concluded.
Some industries saw jobs decline after the ordinance took effect about two years ago, the report said. But the author says those decreases were in step with, or less severe than, a similar trend in Albuquerque, which didn't have such an ordinance at the time of the study.
``If you look at the changing levels (of employment) in Santa Fe and changing levels in Albuquerque, Santa Fe actually did a little better than Albuquerque did overall,'' said Nicholas Potter, a researcher with the university's Bureau of Business and Economic Research.
The Santa Fe City Council commissioned the study after adopting the highest minimum-wage requirement of its kind in the country.
The law's advocates greeted the results as further evidence that members of the Santa Fe business community who mounted political and legal challenges were wrong in predicting gloomy consequences.
A preliminary analysis released late last year, which wage-law backers used in an unsuccessful effort to lobby the New Mexico Legislature to raise the statewide minimum, also had reported no strong evidence of damage to the local economy.
Critics have maintained a wait-and-see attitude, saying ill effects from phased-in increases could still lie ahead.
Meanwhile, Santa Fe's experience is being closely watched nationally as politicians seize on popular support for boosting the $5.15-an-hour federal minimum and the adoption of localized wage laws.
The ordinance initially established Santa Fe's wage floor at $8.50 an hour for employers with more than two dozen people on the payroll, which included about 9 percent of businesses in the city as well as some nonprofits.
After UNM researchers last year released the preliminary analysis, the City Council allowed an increase to $9.50 an hour to take effect Jan. 1. The ordinance calls for at least $10.50 an hour beginning in 2008, with council approval.
The latest study, dated June 30, says affected Santa Fe firms -- in ZIP codes 87501, 87505 and 87507, excluding large employers known to be outside city limits -- added an average of 0.35 employees during the year after the ordinance took effect in July 2004.
During the same period, overall employment levels among Albuquerque firms with 25 or more workers decreased by 2.4 employees, the report states.
``The analysis shows that overall employment levels have been unaffected by the living wage ordinance,'' says the report, which The New Mexican obtained through a public-records request.
Albuquerque's City Council in April passed an ordinance that will increase wages in that city in increments, eventually reaching $7.50 per hour by 2009.
Santa Fe saw employment decline in the health-care and retail sectors during the study period, but the changes were in proportion to similar decreases in Albuquerque.
In the service-intensive hospitality industry, which sees dramatic seasonal shifts, employment rates dropped twice as much in Albuquerque as in Santa Fe.
In the construction industry, however, Santa Fe firms with 25 or more employees saw employment levels drop by 5.6 workers while Albuquerque's rate decreased by 2.
Potter did not know why Santa Fe showed a greater decrease than Albuquerque. But data he saw suggested construction activity was slowing months before the ordinance took effect, he said.
Carol Oppenheimer of the Santa Fe Living Wage Network, which helped push for the ordinance and has monitored its enforcement, said of the latest study, ``This says we should be proud of what we've done because it was the right thing to, and it was the moral and ethical thing to do.''
However, Al Lucero, owner of Maria's New Mexican Kitchen, was skeptical of the research results. ``I think it's still a little too early to see,'' he said. ``Surveys are like polls; you take them for what they're worth.''
The restaurateur said the wage increase cost him $80,000 last year and he had to raise prices 5 percent. ``Hopefully it won't destroy Santa Fe's economy,'' he said, ``but it's not going to help it, either.''
The Bureau of Business Research is working on another study that will examine how the ordinance has affected overall wage levels in Santa Fe, Potter said. That study will look at how much, if any, the ordinance has increased worker incomes and try to determine whether the higher minimum wage has attracted workers from other cities.
Staff writer Natalie Storey contributed to this report.
freenewmexican.com |
