Consider this a good news/bad news scenario. Good news … a new minimum wage rate goes into effect! Bad news … your employer’s business is forced to close because it can’t afford to pay you.
Sound extreme? It’s not. The topic of an unreasonable increase in the minimum wage has been dropped like a bomb on the citizens of Las Cruces.
Whether a business or non-for-profit organization is a member of the Greater Las Cruces Chamber of Commerce or not, no one we’ve spoken to is opposed to a fair and reasonable minimum wage rate. Unfortunately, no matter how many times and how many different people have weighed in on this issue, there is still a political initiative that is destined to go before voters this fall that is unreasonable and will ultimately hurt a good portion of those it is intended to help.
So, what other kinds of consequences might we see? Actions such as layoffs, reduced hours, reduced charitable donations, changes in business models, i.e., stop serving lunch or closing on Mondays will occur. This certainly won’t help the unemployed get jobs. And please, don’t lose sight of one other very important thing: ultimately everything is paid for by the customer.
Common sense and many national studies tell us that small locally owned businesses will be hurt the most. Many of these businesses have been around for generations and the people who have risked a great deal to start a business, but had a passion so their risk was worth it, will lock their doors. And their employees will no longer have a steady paycheck.
Do the math. You will see that increasing the minimum wage from $7.50 per hour today to $10.10 per hour by 2016 or 2017 equals a 35% cost increase to business owners and ultimately consumers. This will devastate our local economy.
Quite frankly, the only way businesses could survive would be by raising prices – which leads to yet another unintended consequence – hurting the elderly and those on fixed incomes.
We know we enjoy a wonderful quality of life here. I assure you the political outsiders behind this unreasonable initiative care nothing about how we live, thrive and survive. In our local economy, the hardest hit will be young people seeking their first jobs. If someone is forced into paying a higher wage, they are going to be even more reluctant to hire someone that is unskilled and just entering the workforce. Combine that with more and more mature people re-entering the workforce, this situation becomes even more of a challenge.
If that’s not enough, consider our proximity to Texas, whose minimum wage is currently $0.25 per hour less than New Mexico’s and who is not considering such an increase. Prospective businesses looking to relocate to, or open in, the southwest will go where it costs less to operate, across the state line. With this type of disadvantage, it makes it even more difficult to compete for those higher paying jobs that we really need for our community to grow.
The best way to increase wages is to focus on job creation and preparing the workforce to fill positions that are available; not to add additional/artificial mandates on companies that are struggling to survive. Our community needs to dedicate resources to create an environment where higher wage opportunities exist and businesses flourish. Improve the business climate, reduce regulations and drive
unemployment down which reduces the supply of labor and see how the market reacts. A prime example is what is happening in the eastern part of the state where the oil business is driving wages up and unemployment down.
Lastly, after speaking to only two of our members, there are currently 130 jobs, with both benefits and growth potential, currently available that start above the current minimum wage. These companies plan to hire 600 people by the end of this year. An increase in the minimum wage changes not only their hiring plans, but puts the 500 current employees in jeopardy, as these businesses have facilities in other states not wrestling with this problem.
Does a group that is dead set on implementing a change of this nature after hearing about all these terrible consequences, truly have the best interests of the people at heart? Or is this yet another instance of outside influences, and outside money, trying to dictate how we live our lives?
Good news? We say ‘No’.