Santa Fe's mandated minimum wage will rise on Jan. 1 to $9.92 an hour — an increase of 42 cents — Mayor David Coss announced Monday.

Coss said the 4.457 percent boost, based on the regional Consumer Price Index, is particularly important for lower-wage workers in the face of a national economic recession.

"In times of hardship like these," he said, "the living wage is needed the most."

Some members of the business community, however, have said they would like the City Council to delay a hike in the local wage floor until the economy improves. Many of the affected workers have jobs in the restaurant and hospitality industry.

Simon Brackley, president and CEO of the Santa Fe Chamber of Commerce, said Monday that business owners he represents were displeased that City Hall would consider temporarily freezing wages for its own employees because of economic conditions but is unwilling to let private businesses do the same.

Brackley said he had been contacted by "dozens and dozens" of employers, both for-profit and not-for-profit, concerned about the higher wage.

"Everyone is having to look at the bottom line," he said. "They're all having a difficult time budgeting for 2009."

One small-business owner, Dan Hogan, whose business is P.D. Bean, a coffeehouse on Cerrillos Road, said the current minimum wage "is too high for the kind of work involved" at his business. "This isn't skilled labor."

Hogan also noted the ripple effect of a higher minimum wage. If the starting wage soon becomes $9.92 an hour, he said, hiring a new employee will require increasing the pay for a current worker. Keeping the wage the same for the existing employee, he said, "is not fair."

The city last year put off a scheduled hike to $10.50 per hour under a deal that linked future adjustments to the Consumer Price Index and expanded the ordinance to include smaller businesses. The first such adjustment will begin Jan. 1, 2009.

At $9.92 per hour, the wage floor for employers in the city would remain well above the statewide minimum, which is set to rise Jan. 1 to $7.50 an hour, up $1 from the current level.

Under an amendment to the city's wage ordinance adopted late last year, the local minimum wage will be adjusted upward annually by an amount corresponding to the previous year's increase, if any, in the Consumer Price Index for the Western region of the U.S. for urban wage earners and clerical workers.

"The City of Santa Fe used the 12-month average from October to October as the figure for the previous year in order to give businesses and employees the most stable, up-to-date number while also providing enough time to plan for the coming year," a City Hall statement said.

The statement also said minimum-wage laws promote the general welfare, health, safety and prosperity of Santa Fe by ensuring workers can better care for their families through their own efforts and without government financial assistance.

However, if a period of price deflation results in a drop in the CPI, the city wouldn't lower the minimum wage.

City spokeswoman Laura Banish said the wording of the city ordinance only addresses an increase based on annual CPI data, and cannot result in a decrease even if that indicator is negative.

"The living wage can never go down," she said. "But it could potentially stay flat."

The mayor, who announced the wage adjustment data at a noon news conference outside City Hall, was joined at the microphone by City Councilor Rosemary Romero and Santa Fe Alliance executive director Vicki Pozzebon.

"I wasn't part of enacting (the mandated minimum wage)," said Romero, who was elected to the city governing body in March. "But I'm happy to support it."

Pozzebon, whose group represents some locally owned businesses, also was supportive of the cost-of-living increase, saying the measure will "help keep families together" and will "instill confidence in our community."

In other remarks, Coss said the fear that the higher mandated wage would result in the loss of jobs among Santa Fe businesses was unfounded.

A study by the Bureau of Business and Economic Research at The University of New Mexico indicated there was no negative impact on business or employment following the city's implementation of a mandated wage in 2002.

"Santa Fe unemployment is up this year," Coss said, "but not because of the living wage. That's the result of national economic conditions."

Carol Oppenheimer of the Living Wage Network, a nonprofit that helped push for the city's wage law, welcomed the pending increase.

A study by an economist who testified in a court case in 2004 has shown the pending increase would amount to only a 1 percent cost increase for restaurants, Oppenheimer said, which she said is a negligible amount.

The same study indicated the current $9.50 minimum wage has declined in purchasing power and, to keep up with inflation, the minimum wage should actually increase to $10.15, she said.

Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.com.