The minimum wage has to be raised the right way

by Savanna Duran
March 16, 2015

Increasing the minimum wage, which would positively affect many workers, continues to be discussed during the current legislative session. Raising the minimum wage benefits workers and the economy because low-wage workers will spend their extra income. Raising the wage will allow workers to purchase necessities like food, diapers and gas—most of which will be purchased at local businesses. This circulates money back into the economy, creating jobs. Several bills that would raise the wage are under consideration, but for the increase in the minimum wage to be successful, it must be done correctly.

The minimum wage for the state—$7.50 an hour—has not been raised since 2009. A bill to raise the minimum wage to $8.50 was passed in 2013 but was vetoed by Governor Martinez. The Governor has since stated that she would be willing to raise the minimum wage by a much smaller increment. Several bills are being considered during the current legislative session.

It is impossible to live off of a minimum wage income—this is especially true for families. At the state minimum wage of $7.50 an hour, an individual working full time earns just $15,600. That is lower than the federal poverty level for a family of two. What’s more, when it is raised so rarely, the minimum wage simply cannot keep up with inflation. One of the steps that must be taken to prevent wages from decreasing in value is to ensure that they rise with inflation. This is called indexing, which automatically adjusts the wage to the Consumer Price Index. By doing so, it will prevent inflation from decreasing the purchasing power of workers’ wages. House Bills 20 and 138 would raise the wage to $10.10 and $8.40, respectively, and include indexing. Senate Bill 432 would raise the wage to $10.10 in steps over the next few years and then begin indexing.

In order for the minimum wage to benefit all workers and the economy, the bill must be free from loopholes that prevent certain workers from benefitting. Some lawmakers want to allow businesses to pay workers less than the minimum wage while they are in the early months of the job. This so-called “training wage” gives unscrupulous businesses an incentive to fire workers once they have completed the training period to avoid paying the increased minimum wage. Senate Bill 10 would raise the minimum wage to $8.30 an hour but allow employers to pay a $7.50 an hour training wage for six months.

Another potential provision of the increase in minimum wage that would be detrimental would be to preempt the right of cities and counties to raise the minimum wage above that of the state. This would prevent local governments—and in some cases their voters—from adjusting the minimum wage to the local cost of living as needed. While House Bill 498 would preempt local minimum wages laws, it has the added disadvantage of not raising the minimum wage.

The simple truth is that it is impossible and impractical to live off of a minimum wage income. The benefits of raising the minimum wage will ultimately help individuals and families who are earning low wages as well as help the state’s economy. But it must be done correctly.

Savanna Duran is a senior at the University of New Mexico and an intern at New Mexico Voices for Children.