New Mexico town offers nation’s highest minimum wage

Santa Fe New Mexico has eclipsed San Francisco as the city with the highest minimum wage in country, something that may come as a surprise to many.

“Well we surprised ourselves a little bit too,” Mayor David Coss says proudly. "In Santa Fe we think it's very important for us to be leaders. We've been leaders in historic preservation. We've been leaders in economic development. We've been leaders in culture and we think it works for our town."

Many local business owners are not as proud that their city of around 100,000 now has a minimum wage of $10.29 an hour.

“One of the problems that I have is you can't charge $20 for an enchilada,” explains Al Lucero, owner of Maria’s New Mexican Kitchen which has long been a Santa Fe institution.

“I think the key to our success is our reasonable pricing,” Lucero says. “If this continues it's not going to make us raise our prices although we'll probably have to eventually. But it's going to put more people out of business. It has already discouraged people from coming in to establish a new business in this market.”

The cost of living in the southwest artists’ mecca is around 18 percent higher than the national average. Mayor Coss says the city felt compelled to help entry level workers, many of whom work in businesses which cater to tourists.

“I think it's important to have this base level under working people in Santa Fe so that all the efforts we do to improve our economy benefit everybody.”

The city decided it simply couldn’t wait for Congress to raise the national minimum wage and in 2003 the city passed the Living Wage ordinance which ties the city’s minimum wage to the Consumer Price Index for the western United States. When the CPI goes up, the wage automatically follows.

“If you look at Santa Fe's minimum wage of 10.29 an hour, that's roughly equivalent to what the minimum wage was in the whole country in 1968 (adjusted for inflation). It's interesting that puts Santa Fe in a leadership role: being back where we were for working families in 1968.”

Simon Brackley, President of the Santa Fe Chamber of Commerce, says the ordinance is just plain bad business.

“My job as the Chamber of Commerce President is to say yes, bring your business to Santa Fe, we would love to have you here. But realistically if you have the kind of business that is dependent on hiring a lot of entry level employees you have to do the math, and it's going to be difficult to be competitive in that area.”

Just outside the city limits businesses pay the state mandated minimum wage of $7.50 an hour. Brackley says that hurts businesses in town. He also questions how high the wage will ultimately go.

“That's what I'd like to ask our Mayor, where is the cap? The wage goes up regardless of what the economy's doing. It never goes down it just continues to go up.”

Lucero says the law doesn’t just hurt businesses, it hurts workers because business owners are being forced to find places to cut back in order to absorb the increased cost of the wage hikes.

“I don't want to give up the paid vacations because you need a vacation. I don't want to give up the healthcare because gosh you have to have the healthcare. So if we back off on anything it's probably going to be on the overtime that gives a poor guy the chance to make a little extra money.”

In taking the top minimum wage spot, Santa Fe has edged out San Francisco, where the minimum is $10.25 an hour.