After an emotionally, physically and financially draining 2020 for most folks, people are moving into 2021 with an optimistic outlook on what the year can deliver. For New Mexico’s minimum wage earners, they can expect a little more out of their paychecks thanks to recent increases in base wages.
New Mexico joins a collection of 23 states from across the country that have committed to increasing their state’s minimum wage pay. As depressingly defined by the New Mexico Department of Workforce Solutions (NMDWS), minimum wage is the lowest hourly, daily or monthly wage that business may legally pay to employees or workers. While the federal minimum wage remains at $7.25 per hour, as of Jan. 1, the minimum wage in Albuquerque will step up from $9 to $10.50 for hourly employees, the largest increase in the country. Employees that have tip-based jobs will also see an increase in their pay by 20 cents from $2.35 to $2.55 per hour.
The minimum wage increases are a result of the New Mexico Minimum Wage Act, which was signed into law by Governor Lujan Grisham on April 1, 2019. The Minimum Wage Act initially boosted minimum wage pay from $7.50 per hour to $9 per hour, the first increase in a 10-year time period. Through the act, minimum wage pay will continue to increase in January over the next two years, with a step up to $11.50 per hour in 2022 and $12 per hour in 2023. “Governor Lujan Grisham, and the rest of this administration, believe strongly that a fair day’s work deserves a fair day’s pay,” said Bill McCamley, NMDWS Cabinet Secretary. “If COVID has shown us anything, it’s that our low-wage workers like grocery store employees, janitors, bus drivers and health care heros keeping our communities going deserve a raise now more than ever.” The City of Santa Fe, along with Santa Fe County, which have their own living wage ordinances, will see minimum wage pay increase to $12.10 per hour. NMDWS enforces the state and federal minimum wage, and employers are required to post the New Mexico Minimum Wage Act Summary Poster in a place where all workers can easily see it.
Across the country some states, such as Ohio, Montana, Arizona, Main and Alaska, are showing minimum wage pay increases by way of a few nickels or less. Other states, such as Illinois, California, Arkansas and New Jersey, have increases of $1 or more. (New Mexico is the highest with a $1.50 increase.) All of these states, however, still have minimum wage pay higher than the federal level. But is it enough? There are many who would argue that minimum wage should not be a living wage, as it can potentially increase costs and pressure on businesses, especially small businesses—a cost that ultimately passes to the consumers. Economists, such as Ben Zipperer of the Economic Policy Institute in Washington, D.C., a nonpartisan think tank, identifies that minimum wage workers, and low-wage workers generally, are mostly adults and disproportionately women of color. Zipperer argues that a national $15 wage by 2024 is an important corrective to ensure that low-wage workers share the benefits of economic growth.
Whatever the eventual outcome, a statewide increase, such as the one in New Mexico, can potentially provide some much-needed support to harder-hit rural families and is a helpful beginning step to lifting people out of poverty.