Report: Higher Minimum Wage Gives Modest Economic Boost
July 30, 2012
FOR IMMEDIATE RELEASE
ALBUQUERQUE—If New Mexico lawmakers were to raise the state’s minimum wage to $7.75, the state would see an increase of some $12.8 million in its gross domestic product, and more than 100 jobs would be created.
That’s one of the conclusions in a new report from New Mexico Voices for Children, “How Raising and Indexing the Minimum Wage has Impacted State Economies.” The report also looks at how other states that have minimum wages higher than the federal minimum wage are faring.
“Raising the minimum wage would give the economy a modest boost, and it would be a big help to our lowest paid working families who have seen their wages decline over the last several years,” said Gerry Bradley, Research Director of NM Voices and report author.
The federal minimum wage is $7.25 an hour. New Mexico’s minimum wage is $7.50 an hour and is higher in Santa Fe. Even so, neither the federal nor state wages have been increased in three years, which means the purchasing power has declined. The report urges the state to raise the minimum wage again and then index it to inflation so that it rises automatically in conjunction with the Consumer Price Index.
“Every time there is talk about raising the minimum wage, the usual opponents predict economic gloom and doom. That simply doesn’t happen,” said Bradley. “As this report—and others like it—shows, many of the states with a minimum wage set above the federal minimum have stronger job creation, lower poverty rates, higher per capita income, and a lower percentage of minimum wage workers than many states that adhere to the federal wage.”
The report also spotlights Santa Fe, which has a higher minimum wage than the rest of the state. Santa Fe’s so-called ‘Living Wage’ is indexed to inflation. That city’s unemployment rate is the lowest in the state’s four metropolitan areas. Santa Fe has also been experiencing job growth, while the other three metro areas are still losing jobs.
This report follows a similar one released earlier this year that looks at the demographics of New Mexico’s minimum wage workers. The vast majority are adults working more than part-time hours. A minimum wage increase would particularly benefit women and Hispanics.
“Raising the minimum wage would help some of our most vulnerable families and when you improve a working family’s economic situation, you give their children a better shot at success in school and as adults,” Bradley added.
The report is available online at http://www.nmvoices.org/wp-content/uploads/2012/07/Minimum-Wage-report-web-8-12.pdf
New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. Our fiscal policy work is funded by grants from the Annie E. Casey Foundation, the McCune Charitable Foundation, the WK Kellogg Foundation, and the Working Poor Families Project.
2340 Alamo SE, Suite 120, Albuquerque, NM 87106-3523; 505-244-9505 (p); www.nmvoices.org
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