Aug. 28—SANTA FE — Facing a housing crunch, declining public school enrollment and rising consumer prices, the mayor of New Mexico’s capital city is proposing a living wage reboot.
But some business leaders are already expressing concern about the proposal’s impact, particularly on Santa Fe’s restaurant industry.
Mayor Alan Webber’s plan would increase Santa Fe’s minimum wage to $17.50 per hour — up from the current $15 per hour — with future increases tied to rental cost increases and inflation.
That increase, if approved, would make Santa Fe’s living wage the highest in New Mexico. But the $17.50 per hour wage floor would still be lower than some other cities’ — including Denver, Seattle and Flagstaff, Arizona.
Webber, who is not seeking reelection this fall, said the proposal came about based on the findings of a report on child hunger in Santa Fe. He also said increasing the living wage would be part of a broader effort that includes building more affordable housing units.
While acknowledging a higher living wage would not be a “fix-all,” Webber said the current minimum wage has not kept up with surging housing costs.
“We still have a big gap between what people make and what it costs to rent a two-bedroom apartment in Santa Fe,” he said. “We can’t close the gap in its entirety, but we can do better.”
Rental costs in Santa Fe grew at more than double the national rate from March 2017 to March 2024, increasing by 74% during that time period, according to a Pew Charitable Trusts report. A review of current listings shows the average rent ranges from $1,100 per month for a one-bedroom apartment to around $1,500 for a two-bedroom apartment.
For local residents like Dominic Quiroz, that reality poses a month-to-month math problem of making ends meet.
Quiroz, who moved back to Santa Fe after working construction in the Dallas area, said he currently works two jobs, including for the company that runs Santa Fe’s homeless shelter.
“If everything else goes up, I feel like the minimum wage should, too,” Quiroz told the Journal.
He also said an increase in Santa Fe’s living wage would make it easier for many working residents to pay for food and other basic expenses.
New Mexico’s current statewide minimum wage is $12 per hour, after the final step-up of a multi-year increase signed by Gov. Michelle Lujan Grisham took effect in January 2023.
History of Santa Fe’s living wage
Santa Fe became one of the first cities in the nation to enact a local living wage higher than the statewide minimum wage in 2004, after city councilors approved an ordinance setting an $8.50 per hour minimum pay rate.
It has subsequently increased in recent years, due primarily to an annual adjustment tied to inflation rates that was enacted in 2007, and is currently set at $15 per hour.
The initial living wage ordinance withstood several legal challenges filed by local businesses, and other New Mexico cities like Albuquerque and Las Cruces have followed suit in recent years.
Webber said he expects some pushback from business groups for his latest proposal. But he said many of the doomsday arguments against the 2004 ordinance did not come to pass.
“The data all showed that people’s lives were improved,” he said. “They had more money in their pockets.”
“I think the pushback may be less than there was the first time around, because they’ve all seen what happened with the living wage and it didn’t have all those dire consequences,” Webber said.
Santa Fe Chamber of Commerce President and CEO Bridget Dixson said it’s premature to say whether any local businesses would close if the living wage is increased.
But she said she’s particularly worried about the proposal’s impact on businesses, as many eateries already struggled to stay afloat during the COVID-19 pandemic.
“I know it is definitely a concern,” Dixson said in an interview. “It’s another hurdle for them.”
She said the chamber of commerce is planning to conduct a business survey to gauge reactions to the living wage proposal but said a possible exemption for the restaurant industry could alleviate some of the impact concerns.
Market forces could mute impact
Both proponents and skeptics of the increased living wage appear to agree on at least one thing — most local businesses already pay their workers in excess of the base pay level.
“The market is driving people to pay more because of labor shortages and competition for good workers,” Webber said.
Louis Demella, the acting president of the American Federation of State, County and Municipal Employees local union, said more than a quarter of the union’s roughly 600 members commute to work from outside Santa Fe.
“We have snowplow drivers right now who are living in Albuquerque” due to Santa Fe housing costs, Demella said.
But he said adjusting the pay structure for municipal employees would be more beneficial than raising the city’s living wage, while accusing Webber of misrepresenting AFSCME’s participation in talks about the issue as an endorsement of the proposal.
Meanwhile, some research suggests even a $17.50 per hour living wage would not accurately reflect the realities of living in Santa Fe.
A living wage calculator developed by researchers at the Massachusetts Institute of Technology pegged the amount a single adult with no children living in Santa Fe would have to make to support themselves at $24.42 per hour. For a single parent with two children, the wage level jumps to $56.30 per hour.
Webber does not dispute such figures, but said mandating such high minimum pay levels would not be politically or practically feasible. He recently held a work session with Santa Fe city councilors on the proposal and plans to hold public meetings on the issue in the coming weeks.
If all goes according to plan, Webber said he’s hopeful a city council vote on the ordinance could happen this fall, before he leaves office.
“I’ve got a limited shelf life, so I’d like to get it done before the end of my term,” Webber said.
But some city councilors have questioned the timing of the proposal, as up to eight candidates are currently vying to be Santa Fe’s next mayor.
“I imagine some of this is fulfilling promises that were made a long time ago,” said City Councilor Alma Castro, who is not among those running for mayor.