The New Mexico minimum wage was last changed in 2008, when it was raised $5.50 from $6.50 to $12.00. Effective January 1, 2023 New Mexico’s state minimum wage rate is now $12.00 per hour. It was increased to $12 an hour under the final step-up mandated by a 2019 bill enacted by the New Mexico legislature. New Mexico’s minimum wage is greater than the Federal Minimum Wage of $7.25. The minimum wage for tipped employees is $3.00 per hour. If the tips plus the hourly rate do not equal at least $12 per hour, the employer must make up the difference.
LOCAL MINIMUM WAGES
In recent years several cities and municipalities in New Mexico have established their own minimum wage rates. Here is a list of the current rates along with future increases:
- Albuquerque: $12.00,tipped wage is 7.20.
- Santa Fe: $12.95
- Santa Fe county: $12.95, tipped wage is 3.69
- Las Cruces: $12.00, tipped wage is 4.78
All New Mexico employers must display an approved New Mexico minimum wage poster in a prominent place to inform employees about the minimum wage and their worker’s rights under New Mexico labor law.
MIMIMUM WAGE EXEMPTIONS
New Mexico employers may not pay you under $12.00 per hour unless you or your occupation are specifically exempt from the minimum wage under state or federal law.
There are 3 major categories of exemptions:
- FARM WORKERS, SEASONAL WORKERS, OTHER EXEMPT JOBS
The Federal Fair Labor Standards Act (FLSA) has declared certain jobs, including farm workers, seasonal workers, newspaper deliverers, “informal” worker, such as babysitters, and a variety of others exempt from both state and federal minimum wage law. These exemptions are intended to allow certain types of business to hire workers for temporary or high-volume positions that they otherwise could not afford to fill, thus helping the economy by creating more jobs.
- TIPPED EMPLOYEES
Any worker who earns regular tips , specified as earning at least $30 in tips a month by the FLSA, is eligible for a special tipped minimum wage rate. Employers are permitted to pay tipped employees an hourly cash wage of as little as $2.13 an hour, however, if this wage and the tips earned during that hour do not add up to at least the applicable minimum wage, the employer must make up the difference in cash. Thus, tipped employees are guaranteed to earn at least minimum wage, and can earn more then minimum wage in tips.
- MINORS AND YOUNG WORKERS
The “Youth Minimum Wage Program” allows young workers under the age of 20 to be paid a special minimum wage of $4.25 per hour for the first 90 days of employment with any employer. After the first 90 days have passed, or when the employee turns 20, whichever comes first, the employee must be given a raise to the full minimum wage. This exemption is designed to serve as a “training program” for young workers, although many workers and organizations see it as unnecessary and unfair.
Links to relied upon and quoted source material are here:
BILLS INTRODUCED INCREASING NEW MEXICO MIMIMUM WAGE
There are two bills that have been introduced so far in the 2023 New Mexico legislature to once again increase New Mexico’s minimum wage.
HOUSE BILL 28
House Bill 28 is sponsored by Albuquerque area Democrat Representative Miguel Garcia would tie the minimum wage increases to the cost of living index as set forth by the US Labor Department’s Consumer Price Index. It would require annual increases to the minimum wage tied to inflation. Under an amended version of Bill 28 the inflation-related adjustments would take effect every January, starting next year, and could boost the minimum wage to $15.55 per hour by 2034. The indexing provision was initially included in the 2019 bill but was removed as part of a final-hour compromise during the legislative session.
On January 23, a hearing was held by the House Labor, Veterans’ and Military Affairs Committee on Bill 23. Representative Garcia told the committee his bill was “ a win-win solution for both our workers and our businesses. ” Garcia claimed it would benefit workers while also providing certainty for employers by avoiding big wage spikes mandated by lawmakers. After more than three hours of discussion, the measure was approved on a party-line 7-4 vote. The 7 Democratic committee members voted in favor and the 4 Republicans voted in opposition.
House Bill 28 now advances to its second assigned committee, the House Commerce and Economic Development Committee.
House Bill 25
On January 23, a hearing was held on House Bill 25 by the House Labor, Veterans’ and Military Affairs Committee. House Bill 25 is sponsored by Los Alamos area Democrat Representative Christine Chandler. It would also tie hikes to the Consumer Price Index. It would first increase the current $12 an hour minimum wage to $16 beginning next January 1st.
House Bill 25 is also tied to future increases to inflation starting next year. Chandler said the proposal was based on New Mexico cost-of-living data and aimed at updating the minimum wage amid a labor market that’s changed since the start of the COVID-19 pandemic. Chandler said during Tuesday’s hearing, while adding that ominous predictions about the impact of the 2019 legislation have not proven accurate. Chandler said that ominous predictions about the impact of the 2019 legislation have not proven accurate.
Representative Christine Chandler agreed to revise House Bill 25 after both Democrats and Republicans expressed concern about the size of the proposed jump to $16 an hour. The $16 an hour wage would have made New Mexico’s minimum wage among the nation’s highest. California is set to have the highest minimum wage in 2023 at $15.50 an hour. Under the amended House Bill 25, the minimum wage would jump to $13.50 per hour starting in 2024, then again to $15.50 an hour in 2025, with future increases tied to inflation. House Bill 25 was not voted on by the House Labor, Veterans’ and Military Affairs Committee and remains in committee for future hearings.
Chandler said the increase would be based on what is now considered a living wage in New Mexico. Chandler said this:
“I think it’s a very reasonable bill. … A minimum wage bill for some reason, that perplexes me, seems to take on a life of its own. Battle lines are drawn that I think are unnecessary. I think we all have the same goal of wanting workers who work full-time, 40 hours a week to be able to pay for their basic necessities and I think that’s our goal and we’re towards getting that to happen and I think it will happen this year. … We have been trying to get workers to come into the state, so what we have done is create competitive advantage for the state of New Mexico and sent the message that this is a desirable place for people to come back”
USUAL SUSPECTS OPPOSE AND SUPPORT
Not at all surprising, the New Mexico Chamber of Commerce is opposed to increasing the minimum wage. Rob Black, president and CEO of the New Mexico Chamber of Commerce, believes drastically raising the state’s minimum wage will have negative consequences for the economy. He believes higher wages will force businesses to reevaluate how many employees they can afford as well as what kind of workers they hire. Black argues that businesses understand the pressure to increase wages, but said he is hopeful state lawmakers will invite businesses leaders to the negotiating table. He says the best policies are often compromises both sides aren’t totally happy with. Black says many businesses are already struggling to keep up with the current increases. Chandler’s proposal would signal an overall $8 increase in just 5 years.
Black said this:
“It would really, really exacerbate youth unemployment. … If you raise that wage from $12 an hour to $16 an hour, they’re not going to hire the teenager who has no experience, they’re going to hire somebody else. That puts that teenager in a disadvantage going forward because their work experience now was pushed off for years. … Those employers that can restructure their business model will, those that can’t, won’t be able to, they’ll have to find cost-cutting other ways, or they won’t be able to continue to operate. … There’s a diversity of opinions from all perspectives. … I think there’s willingness to have that conversation, but $16 an hour is frankly a non-starter for the business community.”
The link to the quoted news source is here:
Lobbyists from the New Mexico Chile Association, the New Mexico Restaurant Association and the state’s Cattle Growers’ Association all testified against the legislation, saying it would place an additional burden on employers and lead to higher prices for consumers.
Some of the comments in opposition to the legislation were emotional and highly personal. George Gundrey, owner of the Tomasita’s restaurants in Santa Fe and Albuquerque, called the proposed minimum wage increase an “attack on our family-owned businesses” that would ensure New Mexico remains a high-poverty state.
Republican lawmakers carried on a full throttle attack on the legislation calling it misguided. Clovis area Republican Representative Andrea Reeb said this:
“To me, this is actually a tax hike and it’s going to raise the cost of food.”
Labor union leaders and representatives from groups that advocate for workers and immigrants spoke in favor of the bills. They describe them as essential to ensure low-income workers and families can afford to pay their bills.
GOVERNOR “MUM” ON PASSAGE
In 2019, Democrat Governor Michelle Lujan Grisham signed the 2019 bill increasing New Mexico’s minimum wage from $6.50 to $12.00 delivering on a 2018 campaign promise to increase the state’s minimum wage. The Governor has not said whether she would support additional minimum wage hikes. Last month the Governor’s spokeswoman said the Democratic governor would balance supporting workers with creating a “business-friendly climate” in the state.
NEW MEXICO’S POVERTY RATE
In 2021, New Mexico had a poverty rate in 2021 of 19.1%. This is the third highest in the country and well above the national poverty rate of 13.4%, according to the U.S. Census Bureau. The rate is even higher for New Mexico’s children. 28% of children under age 5 live in poverty and 25% of children under age 18 live in poverty. The 2021 Kids Count Data Book for New Mexico shows that 76% of fourth graders and 79% of eighth graders are not proficient in reading, more than 25% of high school students do not graduate on time, and nearly 12% of teenagers are neither in school nor working. Among adults, 29% read at the level of a 5- to 7-year-old.
MINIMUM WAGE VERSUS LIVING WAGE AND POVERTY LEVELS
“Minimum wages have been defined as ‘the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract’ ”.
A living wage is defined as follows:
“The remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.”
The United Sates 2023 poverty guidelines in effect as of January 19, 2023 for the 48 contiguous states and the District of Columbia are as follows:
Persons in family/household Poverty guideline
The standard or universal work week for hourly paid employees is 8 hours a day, 5 days a week with 52 work weeks in a year for a total 2,080 hours of work a year. To place New Mexico’s minimum wage in perspective, a person who is the sole wage earner for a family of 3 who is paid the $12.00 minimum wage an hour currently in New Mexico would therefore be paid $24,960 a year or a mere $100 above the poverty level for a family of 3. This does not take into account inflation on goods and services, living costs for food and housing.
NEW MEXICO UNEMPLOYMENT RATE DROPS TO 3.9%
On January 24, 2023 the New Mexico Department of Workforce Solutions announced that New Mexico’s unemployment rate continues to drop. According to data released by the department, New Mexico’s the unemployment rate came in at 3.9% in December. This is a 15 year low and the lowest rate in 2022. According to Workforce Solutions data, the last time New Mexico’s unemployment rate stood at 3.9% was in April 2008. New Mexico’s unemployment rate continues to trend closer to the national average, which was 3.5% last month and had tied for a 53-year low, according to federal data.
The state’s unemployment rate measures the percentage of the labor force that is unemployed and is actively applying for work. The state’s unemployment rate dropped each month or remained the same with the exception of October, when the rate had climbed to 4.3% from 4.2% the previous month. The Department of Workforce Solutions data shows December’s unemployment rate is a drop from 4.1% in November and from a high of 5.9% at the beginning of the year.
December’s unemployment number is very different from the rates in 2020 when unemployment had hit a record high during the onset of the COVID-19 pandemic. Ostensibly that was caused the pandemic when many businesses were closed and people were force out of jobs. At the time, the unemployment rate had reached a high of 9.8% in May 2020.
According to the Department of Workforce Solutions, the year over year data shows that some sectors are recovering. Mining and logging grew by 1,800 jobs. Manufacturing added 700 jobs year over year and construction added 2,500 jobs. Large increases have also come in education and health services. In the last year, that sector grew by about 6,200 jobs, or 4.4%, the data shows. Leisure and hospitality also grew by about 5,000 jobs – a trend that held for much of last year.
“Non-seasonally adjusted rates for unemployment show that more dense counties which include Santa Fe, Doña Ana and Bernalillo, tend to trend lower than in less populated counties.
Bernalillo County. … had an unemployment rate of 3% last month, the data shows, while Santa Fe County dropped to 2.8%. Doña Ana County saw its unemployment rate drop from 4% in November to 3.7% in December.
In Eddy and Lea counties, where oil and gas drilling operations reign supreme, the unemployment rate stood at 2.5% and 3.7%, respectively.
Luna County had the highest unemployment rate in the state last month at 11.6%, an increase from 11.1% in November. The lowest rate was in Los Alamos County at 1.5%, according to the data.”
Governor Michelle Lujan Grisham for her par called the unemployment rate a good sign for New Mexico. She said this:
“It’s crystal clear — our economic investments are working and jobs are growing”.
The link to quoted news source material is here:
NEW MEXICO’S CHANGING WORKFORCE
Reilly White is an associate professor with the University of New Mexico’s Anderson School of Management. Recently he was interviewed by the Albuquerque Journal and he said New Mexico’s unemployment rate has followed the same trend as that seen at the national level, for the most part coming in lower each month.
White he said the “nature of the workforce is changing” in New Mexico. He noted that there are fewer government workers compared to a decade ago and an increase in workers in other areas such as education. That drop in government workers, along with the loss of workers in other industries, coincides with New Mexico’s low labor force participation rate and which stood at 55.7% in December. White said this about the drop in the state’s workforce numbers:
“This is due to a number of factors, especially increased retirements. … Despite the oil boom bringing in record revenues to state coffers, employment in the cyclical mining and logging sector is 27% lower than at the end of 2014.”
Governor . Michelle Lujan Grisham called the unemployment rate a good sign for New Mexico. She said this:
“It’s crystal clear — our economic investments are working and jobs are growing”.
COMMENTARY AND ANALYSIS
The New Mexico legislature and the business community needs to come to the realization that New Mexico’s workforce is changing dramatically. With that change must come changes and yes increases to the minimum wage in order to get the state’s minimum wage to a “living wage” and to make the state competitive.
Simply put, the minimum wage was never meant to be a living wage. A living wage should be the ultimate goal. Over the years, several attempts to tie the state’s minimum wage to the cost of living index have failed in the state legislature. The result was that increases in the minimum wages never occurred for a decade and the minimum wage remained stagnant at a mere $7.50 an hour.
Over too many years, several attempts to tie the state’s minimum wage to the cost of living index have failed in the state legislature with Republicans resisting any and all efforts to increase the minimum wage. Simply put, Republicans believe there should be no government mandated minimum wage and that market forces and profits should dictate the minimum wage. Republicans will never support increasing the minimum wage at any time no matter the business conditions.
A Democrat Core Value for decades on the National and State level, and in campaigning, has been to increase the minimum wage in order to make it a living wage. Democrats in the 2023 legislative session hold a 45-25 majority in the House and a 27-15 edge in the Senate and this year’s session is a 60 day session. Democrats would be damn fools not to increase the minimum wage while they have the distinct advantage. Tying increases of the minimum wage to cost of living increases is more than a reasonable approach.