As New Mexico minimum wage hits $12, some lawmakers want to go higher

Dec. 29—On Jan. 1, two years of minimum wage increases in New Mexico will come to an end, leaving the state with the 14th-highest minimum wage in the nation.

The Minimum Wage Act of 2019 has incrementally taken the state from $7.50 to $9 to $10.50 to $11.50 since 2020, with the increases topping off at $12 next week.

Some Democrats say $12 is not enough in today's economy and plan to push legislation during the 2023 session to raise the minimum wage a few dollars more.

"I think that $12 is out of date," said Rep. Christine Chandler, D-Los Alamos. "If you reflect on the economic reality, we live in a different time for a lot of workers around the state."

Chandler is introducing a bill to raise the minimum wage to $16 per hour by January 2024, which would be the highest statewide minimum wage in the country. Rep. Patricia Roybal Caballero, D-Albuquerque, also plans to introduce minimum or "living wage" legislation raising it above $15 per hour.

"I wish her luck," Rep. Miguel Garcia, an Albuquerque Democrat who sponsored the 2019 bill, said about Chandler's $16 plan.

Right now, California is the only state with a $15 minimum wage, but it applies only to businesses with 26 or more employees. As of Jan. 1, California will apply the $15 wage to businesses of all sizes, and $15 per hour will also take hold in Massachusetts. It will also begin on June 1, 2023, in Connecticut. Maryland is scheduled to hit $15 per hour in 2025 and Virginia in 2026, and Hawaii is the first state to announce $16 per hour for 2026 and $18 for 2028.

Several cities in California, Washington and Washington, D.C., are already over $16 and $17 per hour.

Garcia does believe the New Mexico minimum wage should be $15.

"Fifteen dollars, the sooner the better," Garcia said. "It's important that we raise the banner to increase the minimum wage. Is it timely? Will the governor sign it? You have to have buy-in from the governor. I haven't had any feelers from the governor on what she's willing to entertain, if anything."

Gov. Michelle Lujan Grisham in 2019 supported the raiseto $12 per hour but in subsequent years has shown no appetite to go higher. The governor's office earlier this month did not directly address increasing the minimum wage after 2023 when asked by The New Mexican.

"The governor is extremely proud to have enacted significant increases to the state's minimum wage, and she is dedicated to continuing to seek innovative solutions that improve the quality of life for New Mexico's workforce as we near the legislative session," wrote spokeswoman Maddy Hayden.

Roybal Caballero is a longtime advocate for a $15 minimum wage, a dollar figure that gained attention with the "Fight for $15" campaign among fast-food workers in 2012 in New York City. The city reached $15 per hour for small employers a year ago.

She pushed for $15 in 2019. Now she's pushing higher.

"Fifteen dollars might not be enough for a living wage," Roybal Caballero said. "Right now I'm leaning toward something higher than $15."

Roybal Caballero before Christmas was still collecting demographic and economic data to determine which dollar figure to land on for her minimum wage legislation. She wants the same minimum wage for tipped and farm workers as the general minimum wage. Seven states now have the same tipped and general minimum wage, but the New Mexico tipped minimum wage is $2.80 per hour, going to $3 on Jan. 1.

"Getting to $12 was a major leap of good faith and obligation, but it's not enough," Roybal Caballero said. "We don't want individual families to be tied to minimum anything. It starts with getting out of a constant state of poverty."

Chandler wanted a higher minimum wage in the 2019 legislation.

"If we would have been $15 [in 2019] and indexing all along, we would be in the neighborhood of $16 now," Chandler said. "It reflects the reality on the ground. It's what workers need to earn a living wage. The past bill was a good bill, but it was a compromise that didn't go far enough."

Chandler's bill sets $16 for Jan. 1, 2024, and for subsequent years indexes minimum wage increases to the Consumer Price Index, which measures inflation.

Garcia is interested in indexing. So is the New Mexico Chamber of Commerce. And so are 19 states that will start indexing for inflation in January.

"If there are increases, they should be tied to inflation," said Rob Black, CEO of the New Mexico Chamber of Commerce. "A dollar is a very large increase. You saw very large increases, which is hard for businesses to absorb."

Garcia said the business community opposed indexing in 2019.

"If there is appetite in the business community, we need to crystalize that," Garcia said. "I will research putting a bill in place [with] how indexing would look. I will definitely research indexing."

Roybal Caballero plans to include indexing in her bill, too.

Black said the worker shortage driven by the pandemic has pushed many businesses to increase their starting salaries at a faster rate than the 2019 legislation. Rates of $14, $15 and $16 per hour have become fairly commonplace.

"You want to see the market setting those rates," Black said. "In this state, most businesses are paying higher than the minimum wage. We have seen very high increases in the cost of labor."

New Mexico average weekly wages increased 17.1 percent from the second quarter of 2019, one year before the pandemic, to the second quarter of 2022. In Santa Fe County, the wage increase was 21.6 percent, according to statistics provided by the New Mexico Department of Workforce Solutions.

"The less mandates we have on doing business makes us more competitive," Black said. "Those sort of large increases kill businesses. It makes it very difficult for business to adjust. It makes it very hard to hire high school kids for their first job."

Even high school students with internships at the Santa Fe Public Schools work-based learning program are earning $14 and $15 per hour.

"The issue of minimum wage came to the forefront in retaining the workers," Garcia said. "It brought benefits to the fore. Businesses started to ante up. We started seeing workers taking a more aggressive view of what they expected from employers."

The National Federation of Independent Business' New Mexico chapter maintains the $12 minimum wages is "pushing small businesses to their breaking point.

"Our economy has not returned to pre-pandemic levels, as prices continue to skyrocket, and consumers pull back their spending," NFIB State Director Jason Espinoza said in a news release. "With a recession on the horizon, escalating the cost of doing business in New Mexico simply could not come at a worse time."

Chandler and Roybal Caballero don't buy the argument higher minimum wages kill business.

"Now most are paying more than $12," Chandler said. "Many of them have raised it themselves. They disprove their own case."

"The pandemic proved these naysayers saying, 'We will be driven out of business'; it proved they were incorrect," Roybal Caballero said. "Businesses are still open, and they increased their wages and offered benefits."