Inside the Capitol

Monday, February 06, 2006

2-13 Minimum Wage Fight

Syndicated Columnist
SANTA FE -- Should government tell businesses how much to pay their employees? If so, which level of government should make that decision? Does state government have the authority to tell local governments they can't set wage levels?
Such questions are zooming 'round and 'round the Roundhouse as the 2006 Legislature nears its close.
It all started when the Santa Fe City Council voted to raise the federally-mandated $5.15-an-hour minimum wage to more than double that amount on a phased in basis. Currently, the minimum is $9.50 an hour.
Then, along came Albuquerque and put the question to its voters. It appeared the answer would be in the affirmative until greedy employee unions decided to add other goodies for itself into the referendum, which ended up losing narrowly.
Naturally, business people in the rest of the state began wondering who might be next. They soon found out the answer was that the entire state would be the target.
Gov. Bill Richardson said he wanted to see a $7.50 minimum, phased in over three years. Speaker of the House Ben Lujan countered with a $7.50 minimum immediately.
Some local business interests said those decisions should be left to local communities while others said local communities should be prohibited from making any minimum wage decisions.
And yes, sacred principles, such as local autonomy, have been thrown to the wind as all sides jockey to protect whatever they see as their self interests.
There seems to be some agreement that a dollar increase, to $6.15 an hour might not hurt anyone very much. Research supplied by the Legislative Finance Committee staff indicates that the "real" minimum wage, an economic term, is around $6.50 an hour and that an increase to that area wouldn't result in a large amount of employees being "disemployed."
That information can be found at Click on "Bill Finder" and type in House Bill 258.
This Legislative Finance Committee's Web site also discusses the fact that a $5.15 minimum wage is heavily subsidized by the government, meaning taxpayers, since a person at that wage level qualifies for many government assistance programs, including the federal earned-income tax credit, Medicaid and food stamps.
Raising the minimum wage also means that affected employees will pay more income tax and buy more goods, thereby increasing state gross receipts tax collections.
And of course, increasing the minimum wage means that businesses will have to increase the price of their goods and services, which also comes out of our pockets. That's right, no matter what happens, those of us above the minimum wage level either pay more in taxes or higher prices to support those who are at the minimum wage.
Legislative Finance Committee research also shows that the minimum wage, adjusted for inflation, is at its lowest since the 1940s. Congress has waited longer this time than usual to raise the minimum wage.
Usually, when Congress does raise the minimum wage, it trails the "real" minimum we discussed earlier. What actually happens seems to be that by the time political pressure mounts to increase the minimum wage, the economy has moved forward to the point that the new minimum wage is merely increased to meet what already is happening.
But proposals before the Legislature attempt to take that minimum higher than what is currently happening, prompting proposals from those who normally oppose federal intervention, to wait until the federal government raises its requirement.
It is reported that 17 other states have already raised their minimums, including some of our neighbors. And some of those states report economic gains as a result of doing so. Does that mean that New Mexico, which ranks at the bottom of such categories, would be helped? That is part of the debate.
In case you're thinking none of this will ever affect you, it might. Jurors are paid minimum wage, so at least that duty becomes a little less onerous.
MON, 2-13-06

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail)



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