Employers in the city of Santa Fe will have to pay all workers more than $10 an hour beginning in March, but the Santa Fe Economic Development Division said Thursday it still doesn't know exactly how much more.

A city ordinance requires annual adjustments in the municipal minimum wage based on federal statistics, but the latest numbers won't be finalized until next month.

City administrators, who failed to make the required adjustment this year, estimate that the current minimum hourly wage of $9.85 will jump next year by at least 37 cents and maybe as much as 47 cents.

While officials won't know the exact level of the wage floor for 2012 until the U.S. Bureau of Labor Statistics finalizes 2011 inflation numbers in mid-January, they already know that the current Santa Fe "living wage" should have gone up by 1.4 percent earlier this year — to $9.99.

Last month, after inquiries from The New Mexican, Mayor David Coss said city staff had neglected to adjust the wage this year, which is required by law whenever the regional Consumer Price Index shows an annual increase. Coss and the city manager decided this month not to pursue a retroactive wage hike for workers, the mayor said Thursday, but to roll the 2011 increase into the 2012 adjustment.

Based on the first 11 months of the year, the estimated wage increase for 2012 will be 3 percent — pushing it to between $10.22 and $10.32 per hour, according to Kate Noble, a city economic development specialist.

Coss said he has phoned operators of about a half-dozen businesses to talk about the increase.

City lawmakers adopted the current wage law with an escalator provision as part of a compromise over changes to the original 2002 wage ordinance, which had called for the minimum wage to rise to $10.50 an hour by 2008. While the mayor had assumed the law would hit the hospitality industry the hardest, Coss said the biggest impact will be on thousands employed by big-box retailers and grocery stores in Santa Fe.

"I believe it could be an economic stimulus for us to have Walmart and Target and Albertsons paying a little more money locally that we know gets spent locally and does not get transferred out of state," he said.

The city's lowest-paid workers will notice the extra money in their annual income next year, Coss said. Based on a 40-hour work week, someone earning minimum wage who sees a 37 cent hourly increase in Santa Fe would get an extra $14.80 a week, or about $770 over 12 months. Noble said the actual increase for 2012 could be as much as 47 cents.

"It will help them pay for their gasoline and their natural gas for heating and just make them a little better able to keep a roof over their heads and keep their families healthy," Coss said.

Santa Fe has one of the highest city-level minimum wages in the nation, close to that in San Francisco, which has already announced that its workers will earn more than $10 in the new year. Wage floors are also increasing at the state level in Arizona, Colorado and six other states next year. New Mexico's minimum wage is still at $7.50, with no planned increase on the books. The federal minimum is $7.25 an hour.

Some city business operators are wincing about the change. One manager at a Cerrillos Road fast-food restaurant who didn't want his name used said he's still reeling from the city's announcement in 2009 that it would hike the wage floor to $9.92 from $9.85. Just weeks after the business gave its lowest-earning employees that raise, the city sent out a postcard explaining it had erred and that the wage would stay at $9.85 that year. His employees got to keep that raise, however.

"I don't think it has done anything for Santa Fe," the manager said of having a higher minimum wage than other cities in the region. "Some national restaurant chains have chosen not to come here because of it, which I think is bad for the city in that we are losing [gross-receipts tax revenue]," he said.

Fred Cisneros, owner of Cisneros Design for 18 years and a partner in the six-year-old Flying Tortilla restaurant, said he agrees that the city's higher minimum wage is a problem for local business.

"We are in probably the worst year of this economic stress," said Cisneros, who chairs the board of directors for the Santa Fe Chamber of Commerce. "I think the living wage is contributing to the high cost of living here."

Cisneros said several business owners have told him that each time there is an increase to the city's minimum wage, they lay off workers. The wage floor also causes compaction, he said, a scenario where higher-wage earners don't get raises because money goes to the lowest-level workers.

"We don't have a lot of strong, large corporate infrastructure businesses here that can carry the underlying weight of an economy," Cisneros said, adding later that the government mandate on labor costs is "bleeding" small business.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.


An earlier version of this story gave the wrong calculation for the weekly impact of a .37 increase for a full-time worker.