Maybe we could better help these people by teaching them new skills where they can get out of that entry level job and onto other more rewarding means of providing for their families. Maybe they could decide to get an higher education degree that would also help our struggling colleges and universities.
Is a minimum wage increase good for the economy? During a recession when businesses are struggling, it will lead to greater job loss. Keep in mind that it is not the bottom level of the pay scale solely affected. Every wage above it will be driven up as well.
On the other hand, a minimum wage increase will increase revenue from Gross Receipt Taxes (GRT), because it will force inflation and prices will go up to cover the increased cost of labor. So, the government will definitely make more money in this indirect tax. Of course, it will also increase the state’s labor costs by about $1 million.
How much are you willing to pay for that loaf of bread and half gallon of milk? Those prices will be increasing. As every business in the supply chain is affected by the increased minimum wage, they will raise prices. When you consider that loaf of bread that means any business providing raw materials, such as the ingredients to the bag it is stored in, the baker, the transporter and the grocery store that sells it. Each one will be raising its price to cover costs and all of those increased costs will be passed on to consumers.
There are many in the state legislature who support a minimum wage increase and many who do not. SB 386 (C. Sanchez) passed the state Senate 24-6 with bipartisan support, however 12 senators were absent for the vote. So how strong is the legislative will to increase the minimum wage?
There are some business groups supporting an increase, others not actively involved in the discussion and the NMBC consistently opposing an increase. AZ and CO are over $9/hour and TX, UT and OK are at the federal minimum wage of $7.25/hour. Does this make New Mexico more or less competitive with our neighboring states and how will it be viewed by companies considering relocating here?
With NM at 7.50/hour, much has been written on the subject. NMBC Op Ed here, Senator Clemente Sanchez Op Ed here and a Journal article here.
So what do you say? Shall we raise the minimum wage now in the midst of a recession and be higher than three of our neighboring states? Give us your thoughts; we value your opinions. Send comments to nmbiz@nmbizcoalition.org.
NMBC at the Roundhouse on your behalf: NMBC is in Santa Fe most every day of the session in support of our priority objectives and against job killing legislation. We have made it easy for you to keep tabs on all the bills we are watching through our NMBC BillTracker.
2017 Legislative Heroes and Zeroes Update: NMBC is pleased to relay that (so far) our advocacy against raiding the NM Land Grant Permanent Fund (LGPF) has had a positive effect. A bill that would have taken $7 billion dollars out of the LGPF was tabled/killed in committee. NMBC is cautiously optimistic that this trend will hold and want to say ‘Thank You’ to the Legislative Heroes from both parties that vote to safeguard the LGPF and our children’s future.