Some advocates of mandated increases in the minimum wage have argued that Santa Fe, the city with the highest minimum wage in the nation, provides a counter-argument to opponents of such laws who say that high minimum wage laws cost low-skilled workers their jobs. Yet, Santa Fe’s overall unemployment rate is relatively low and at 5.8 percent as of July 2012, far below the federal rate which exceeds 8 percent.
What does this mean? Could high minimum wages have little, no, or even a positive impact on unemployment? Not so fast. First and foremost, local labor markets are unique in their own way. Santa Fe has a population of only 70,000 and is unique within New Mexico as an international tourism destination, hub for the arts, and center of state government.
However, minimum wage laws DO impact young people disproportionately. So, what has the impact been in Santa Fe?
According to data obtained from the Employment Policies Institute, for 16-24 year-olds, as of July, the unemployment rate for this group was averaging 20.3 percent in Santa Fe, NM. Nationally, this figure was averaging 16.6 percent in July. So, it’s roughly four percentage points higher in Santa Fe, NM, than it is nationally.
In other words, Santa Fe has a low unemployment rate for middle and high-skilled workers, but if you are looking for a low-skilled, entry-level job, you should go elsewhere. That’s not surprising, but it is worth pointing out as the minimum wage issue works its way through the Courts.
To bolster the argument that Santa Fe’s minimum wage impacts low skilled workers, take note that Santa Fe Greenhouses (High Country Gardens) has closed its Santa Fe store until next March. This is the first time that the Santa Fe store has ever closed, to the best of my knowledge. The Albuquerque store is remaining open. Greenhouses use tons of low skilled workers.
The Santa Fe New Mexican ran an article quoting David Salman, the owner, explaining why he decided to shutter the Santa Fe store until next year. Mr. Salman talked about high water rates in Santa Fe, competition from big box stores selling plants, and the fact that most plant purchases take place in the spring.
The fact that the Albuquerque store is remaining open seems to prove the point that it’s profitable to keep the Albuquerque store open. If you assume that labor is the highest cost for most businesses, what does Albuquerque have that Santa Fe does not? Oh yeah, we DON’T have the highest minimum wage rate in the U.S.
The Albuquerque store is closing.
The minimum wage law used to enable the hiring of unskilled kids who needed summer jobs and to learn skills. When the minimum wage is increased beyond what is proper, as Santa Fe did, eliminates them from the job pool. Employers increasingly seek the highest and best qualified persons for the job if they are forced to pay a wage that is higher than is proper for the job requirements.
Add to that the problem that, quite frankly, some people aren’t worth even minimum wage because they don’t work and steal, and it’s no wonder jobs dry up when the minimum wage is artificially increased by criminals posing as city counsellors.
An economy based upon artificial stimuli ultimately leads to NO economy for more and more of us. History shows that Socialism and the elite central planners that drive it always fail in the end. Why should any of the recent examples be any different?
The idea that a high minimum wage discourages low-wage employment is nonsense. Do the arithmetic. Take the difference between the Santa Fe’s high minimum and the state minimum, multiply by 2000 hours, and divide the result into an idea of a living annual wage. Then tell me how many Santa Fe companies have that number of minimum-wage employees so that a reduction to the state minimum would enable the hiring of one more employee. And then tell me why those companies need an additional employee. You cannot do it, so drop this canard. Any cut in the minimum wage would create almost no jobs, but it would increase company profits–the real reason for the push to lower labor costs.
What a bunch of rubbish. “Take any number from one to fifteen, divide it into the number of apples for sale at Albertsons, divide it by your social security number and tell me why it doesn’t equal your idea of a utopian society. Please, seek treatment.