Archive for October, 2012

Editorial: Minimum-Wage Issue Could Harm Workers
By Albuquerque Journal Editorial Board on Sun, Oct 21, 2012
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Albuquerque voters are being asked to amend the city’s minimum-wage ordinance, and while the proposition may be a well-intentioned effort to improve the lives of the city’s lowest-paid workers, it is more likely it will have a negative impact on the very people it is supposed to help.

There are many possible unintended consequences in this provision. As local businesses continue to struggle, they may well resort to layoffs or reductions in workers’ hours. Some businesses could shut down. In Santa Fe, where a cost-of-living provision has boosted its minimum wage to a national high of $10.29 an hour, some business owners are moving out or opting not to locate there in the first place. Though government-heavy Santa Fe’s overall unemployment rate is a low 5 percent, the rate for those ages 16 to 24 — young people looking for work while attending college or youths seeking a first work experience — is said to be above 20 percent.

The timing of this proposal as the Albuquerque economy remains stagnant could not be worse. Passage of the proposition would place city businesses at a disadvantage in the Metro area. City businesses would have to pay a higher rate for entry-level positions than their competitors in the county and Rio Rancho. Along north 4th Street, the minimum wage would vary depending on whether a business was on the east or west side of the road.

The proposition would increase the minimum wage in Albuquerque for hourly workers from the current $7.50 an hour to $8.50 an hour. It would also increase the minimum wage for tipped employees to $3.83 an hour starting Jan. 1, and that rate would climb to 60 percent of whatever the main minimum wage is the following year, or $5.10 an hour if the wage is still $8.50.

It also includes a troubling provision that would add an annual cost-of-living adjustment to the minimum wage based on percentage increases in the Consumer Price Index. During the recent recession, many local workers in both the private and public sectors have gone without raises, in some cases for years. Certainly neither employer nor employee likes that, but the ability for businesses to set wages within the law has likely kept some doors open and has also helped local governments and agencies balance their budgets. It is a strategy no business owner or government official takes lightly, but a necessary one.

Under this proposition, all Albuquerque employers of lower-wage workers could be required to give raises each year regardless of their financial conditions. One of their most personal and important business decisions would be made for them. And even proponents of the increase say they expect that workers currently making up to $10 an hour will expect to get raises if the current minimum wage is increased by a dollar.

It is bad legislation that was poorly crafted and logrolls wage and cost-of-living issues into a single proposition that could be harmful both to local workers and employers.

The Journal recommends a “no” vote on the city of Albuquerque’s minimum-wage proposition.