March 9, 2019

After Senate vote, wage issue heads for showdown with House

The lowest paid New Mexicans are closer to getting a raise.

The Senate passed a bill Friday night that would raise the statewide minimum wage to $9.25 from in October, phasing in increases all the way up to $11 in 2022, which would still be below the wage floor established in cities like Santa Fe.

While it passed 25-17, Senate Bill 437 represented a messy compromise after the state House of Representatives had approved a higher increase backed by Gov. Michelle Lujan Grisham and in turn stirred heavy opposition from the business sector, particularly the restaurant industry.

The Senate’s industry-backed proposal goes now to the House. But even though it would allow Democrats to follow through on a central campaign promise from last year’s election, several lawmakers from the party argued Friday night it does not go far enough.

“This amount wasn’t fixed on anything but a big compromise. It’s not fixed on what it costs to live in New Mexico,” said state Sen. Antoinette Sedillo Lopez, a Democrat from Albuquerque.

The House had approved a bill that would have raised the minimum wage to $12 by 2021. The state government would have then adjusted the rate annually based on inflation starting in 2022. That aligns with the minimum wage increase the newly elected governor called for during her election campaign. But the Senate bill omits inflation adjustments.

House Bill 31 would also have phased out the lower minimum wage for tipped workers. Under current law, employers can pay $2.13 an hour as long as an employee earns enough in tips to earn the equivalent of the overall minimum wage.

That provision was a key friction point for the restaurant industry and it pushed back hard against the bill, launching an advertising campaign against it.

Sen. Clemente Sanchez, a Democrat from Grants, filed SB 437 and it became the alternative backed by industry.

SB 437 would raise the minimum wage to $9.25 from $7.50 in October, to $10 in April 2020, to $10.50 in January 2021 and then to $11 in January 2022.

Employers could pay high school students a different minimum wage of $8.50 an hour, starting in October.

The bill would also raise the minimum wage for tipped employees. Under current law, employers can pay $2.13 an hour as long as an employee earns enough in tips to earn the equivalent of the overall minimum wage. SB 437 would raise that rate to $2.38 in October and $2.50 in April.

Sedillo Lopez proposed Friday night to again tie the minimum wage increase to inflation.

“The poverty problem in New Mexico is not going to be solved by a wage increase that will increase over four years and then won’t be increased again for another 12, 10, 15 years,” she said.

Senators shot down the idea by a vote of 30 to 10, with several Democrats opposing her proposal.

Sen. Jeff Steinborn, a Democrat from Las Cruces, proposed scrapping the lower wage for high school students. But again, senators voted it down.

In all, senators proposed a total of seven amendments to the bill, all of which were voted down.

For example, Sen. Steven Neville, a Republican from Aztec, wanted to push back implementation of the increase by one year.

Sen. Greg Baca, a Republican from Belen, called for a smaller increase instead of going up to $11.

And Sen. Mark Moores, a Republican from Albuquerque, revived a proposal that would bar local governments from setting higher minimum wage rates.

Indeed, the bill would mean little for many workers in the state’s biggest cities. Albuquerque, Santa Fe and Las Cruces already have higher minimum wages. The city of Santa Fe’s rate, for example, rose this month to $11.80 and is adjusted annually based on inflation.

Republicans and some Democrats pointed out the increase, then, would have the biggest impact in rural areas of the state.

“We’re not going to run McDonald’s out of the state but we might run the little hamburger joint out of the state,” said Sen. Bill Sharer, a Republican from Farmington.

But Sanchez argued the bill strikes a balance. “What we’re doing is fair,” he said.

The bill, Sanchez argued, is “stepping it up to give businesses and small businesses time to adjust.”

But the lower rate for high school students would ensure companies do not cut such workers as the minimum wage rises, he said.

“This is trying to help students to keep a job,” he said.

The Senate passed the bill along party lines, with Democrats voting for it along with one Republican, Sen. Sander Rue, of Albuquerque.