Dee Ann Kimbro, who owns two downtown Lovington businesses, has a simple plea for state Democratic lawmakers who want to link the New Mexico minimum wage to inflation to provide potentially automatic increases:
“Don’t do that,” she said Thursday. “Please.”
Draft bills from state Reps. Miguel Garcia, D–Albuquerque, and Christine Chandler, D–Los Alamos, were published Wednesday that would provide an automatic adjustment to the state’s minimum wage based on the consumer price index published by the U.S. Department of Labor. If approved as currently written and signed by Gov. Michelle Lujan Grisham, minimum wage in New Mexico to $16 per hour starting in 2024, with automatic increases annually thereafter to offset inflation..
New Mexico is already one of 30 states and the District of Columbia requiring employers to pay more than the federal minimum wage of $7.25. The greatest state minimum wage in the country currently is $15.74 in Washington, more than double the federal rate, according to an Associated Press story.
“The problem is, they’re going to price people right out of jobs,” said Kimbro, owner of the Country Store Quilt Shop and the Downtown Market antique mall, both in Lovington. “If I have five employees and my costs keep going up, I’m going to end up with four employees doing the job of five people.”
And she’s not alone in her concerns over ongoing increases to the state’s minimum wage being mandated at the Roundhouse in Santa Fe. Adrian Carrasco, owner of Brown’s Shoe Fit in Hobbs, believes additional increases to the minimum wage in the state could actually make matters worse.
“The increase, all it does when we start increasing the minimum wage we’re also increasing inflation,” Carrasco said. “The price of the products, shipping, everything.
“Raising the minimum wage looks good on paper but your spending is about the same (as prices increase across the board). You’re just increasing inflation.”
The drive to increase the minimum wage in New Mexico started with legislation adopted in 2019. That law has run its course with another boost on Jan. 1 this year to $12 per hour.
Further minimum wage increases in the state “definitely would affect the number of employees I’d be able to hire, it definitely would affect pricing on my products,” Carrasco said. “And it makes it harder for small business owners to compete (for employees) with the corporations.”
That at a time when small and independently-owned businesses continue having trouble finding employees, said Joe Imbriale, owner of Rig Outfitters and Scrub Outfitters at Broadmoor Mall in Hobbs. Imbriale said he interviews potential new employees weekly who, even if hired, as often as not fail to show up for their first day of work.
And potential future increases in the state’s minimum wage will only have negative impacts on Imbriale’s and other employer’s bottom lines. When the state’s Healthy Workplaces Act went into effect last year mandating paid sick leave for all workers in New Mexico regardless of job status, Imbriale estimates he paid out an addition $50,000, he said.
“If they increase (the minimum wage), that’s going to cost me $100,000 at least,” he said. “That comes out of everybody’s pockets. Not only mine, but everybody’s.”
Imbriale currently employs about 30 people between his two businesses, he said. And Imbriale could easily employ another 10 people, if he could find them. But further increases to the minimum wage could make him and other independent business owners have to rethink staffing, they said.
“I could have five people working for me, making a living, instead only have one” if labor costs increase, Imbriale said. “What are they going to do with those other four people?”
Kimbro, too, said she could have to reconsider staffing if further minimum wage increases are approved. The last increase on Jan. 1 on impacted one of her nine employees, she said, which was manageable. Kimbro isn’t sure if she’ll be as lucky dodging the possible negative affects if another wage increase is required.
“If (minimum wage) goes up again, we’re going to have nine employees (and) I’m going to have to make some hard decisions,” Kimbro said. “I wasn’t hit too hard this time but I will be next time.
“My employees are happy with their wages or they wouldn’t be here. They’d rather (wages) would be lower so they could have the fun they’re having at their jobs. If (a proposed increase) happens, I’m going to have to let some of them go.”
The proposals could be debated once the Legislature convenes on Jan. 17 for a 60-day session. State Rep. Randy Pettigrew, R-Lovington, said he hadn’t read the specific draft legislation but he wasn’t pleased with the possibility of increasing the minimum wage again.
“I don’t agree,” Pettigrew told the News-Sun on Thursday. “It hurts local businesses because the only thing they can do is pass on the expense. Who does it really hurt? It hurts the consumer.”
Pettigrew pointed to a report from the state’s Legislative Council Service from May of last year. Using a typical family of four receiving all the federal and state subsidies they qualified for would make a “base salary” of almost $105,000. An increase to $16 per hour, as stipulated in the draft legislation, totals an annual salary of $33,280 based on a 40-hour, full-time workweek.
But that doesn’t take into account the majority of minimum wage employees don’t work full time. A 2021 study by the federal Bureau of Labor Statistics four 56 percent of minimum wage earners were employed part time, with 67 percent averaging fewer that 39 hours worked per week.
Pettigrew further said 56 percent of New Mexicans aren’t working, forcing the remaining 44 percent to essentially pay their bills. He laid the blame for people not working on the desk of Gov. Michelle Lujan Grisham.
“This is wrong,” Pettigrew said. “People should be made to go back to work … to take personal initiative to excel in their role, become important in the business they work for and get paid a better salary without government interaction.
“Our governor has created a scenario where the majority of our population gets to stay home, smoke dope and play video games instead of going back to work.”
The Associated Press contributed to this report.
Andy Brosig’s email is firstname.lastname@example.org