Minimum wage increases due Jan. 1

The minimum wage in New Mexico is set to rise again Friday, as another annual increase allowed by 2019 state legislation is due to take effect.

Most employers now pay $9 an hour for hourly jobs and $2.55 an hour for tipped employees.

Starting Jan. 1, the minimum wage in the state will increase to $10.50 an hour. Tipped employees earning at least $30 a month in tips are due to receive $2.88 an hour as base pay, although their tips and the hourly wage combined are required to meet the minimum wage rate.

Twelve categories of exceptions to the minimums exist, according to the legislation, Senate Bill 437, which was signed into law in 2019 and was the first statewide minimum wage increase enacted since 2009.

The exceptions include most workers younger than 18, certain agricultural workers, contract or seasonal workers and some categories of workers for religious and charitable organizations.

In addition, several cities and counties in New Mexico — including the city of Santa Fe and Santa Fe County, Albuquerque, Las Cruces and Bernalillo County — have their own minimum wage laws.

The state increase will mean eligible full-time employees could earn as much $3,120 a year more in gross pay during the upcoming year.

But the rising wage is coming at a time when many New Mexico businesses are having their own financial struggles.

“I think it is going to be incredibly challenging for businesses at this time when they are operating oftentimes at 25% of capacity to see a significant bump in salary obligations,” said Ron Black, president of the New Mexico Chamber of Commerce. “But given that it was an act of Legislature and is law, my understanding is that it would require an act of Legislature to change it, and that is just not going to happen before Jan. 1.”

Legislators in Virginia have decided to delay their state’s scheduled minimum wage increases during the coronavirus crisis, and the mayor of Las Cruces suggested in September the city could enact a temporary decrease during the COVID crisis in the $4.10 an hour it requires for tipped employees.

But no changes in minimum wage laws in New Mexico have occurred so far in 2020, and the suggestion of the Las Cruces mayor was criticized by several city councilors who said workers are struggling as much as businesses.

The New Mexico Restaurant Association, in a recent post about the upcoming increases, refers people to a 2019 website article about how restaurant owners might adapt by changing their hours so they are closed during slow periods, altering the ingredients they use or gradually increasing the amounts they charge customers.

Two researchers with the Economic Policy Institute, a think tank in Washington, D.C., come down on the side of the benefits of wage increases. They wrote three academic studies published in 2020 did historical analyses of wage increases and concluded they raised consumer spending in local markets.

“Raising the minimum wage directly pushes back against the consumer demand shortfall by providing low-wage workers with money to boost the broader economy,” the Sept. 14 post stated.

The 2019 New Mexico legislation has additional increases scheduled for Jan. 1, 2022, and Jan. 1, 2023.

The 2022 increase will put the minimum wage at $11.50 an hour for most workers and $2.80 an hour for tipped employees. The 2023 minimum is $12 an hour for hourly workers and $3 for tipped employees.