Santa Fe's minimum wage will be the highest in the nation as of March 1. The city announced Thursday that the wage floor will increase to $10.29 an hour — up from the $9.85 imposed on employers for the last two years and a nickel higher than San Francisco's.

The 2002 "living wage" ordinance calls for the city to recalculate the pay requirement annually based on the Western regional Consumer Price Index.

City officials, however, failed to adjust the minimum last March 1 because they assumed that poor economic conditions would mean the index would decline as it had the previous year. In fact, the CPI did increase slightly, so the Santa Fe minimum wage should have been $9.99 for the past year.

"What you're looking at is an increase for both 2010 and 2011 being put into effect," said Kate Noble of the city Economic Development Division. "So we're getting the wage up to where it should be, but there has been a year when it was missed."

For the last decade, Santa Fe and San Francisco have been neck-and-neck for requiring the highest minimum wage in the United States. Because Santa Fe hasn't adjusted its minimum wage for two years, San Francisco was higher for all of 2011 with $9.92 an hour.

As of Jan. 1, San Francisco's hourly minimum wage rose to $10.24 — 5 cents less than what Santa Fe's new minimum will be as of March 1.

The statewide minimum wage is $7.50 an hour, while the federal minimum has been $7.25 since 2009.

The Santa Fe "living wage" ordinance has proved politically popular with those running for elected municipal office. None of the 10 candidates in the March 6 election for four of the eight City Council positions has expressed any opposition to the minimum wage ordinance.

At Wednesday's forum for the north-side District 1 seat, incumbent Patti Bushee and challenger Houston Johansen tried to outdo each other in their support of the minimum wage.

"It's never been proved that it has harmed our economy in any way," Bushee said, calling the high minimum wage one of Santa Fe's "core values." In fact, at less than $10, it's really not a living wage because "you can't really afford to live in this town," she said.

Johansen said he was "incredibly supportive" of the "living wage," but would like to see more enforcement. Baristas and waiters often are paid less than the city minimum wage, but "don't want to rat out their bosses because they want to keep their jobs," he said.

Employees who get tipped can be paid a base rate as little as $2.13 an hour, but the city "living wage" ordinance says employers must guarantee that their base pay and tip add up to at least the city's minimum wage.

On Wednesday, Assistant City Attorney Alfred Walker filed a criminal complaint against Aéropostale Santa Fe, 8380 Cerrillos Road, charging that the clothing store paid part-time employee Brittany Olson $7.50 an hour, rather than $9.85, on Aug. 6 and 7, so she is owed about $25.

"Santa Fe is on the cutting edge of the living wage in the United States," Walker said. "It is extremely unusual for an employer in Santa Fe to fail to pay the 'living wage,' especially after the failure has been brought to the employer's attention. I am aware of no instance where an employer has simply ignored the city's communications in this respect."

Aéropostale's local manager did not return a call seeking comment.

Employees who are not getting the minimum wage also have the choice of filing a civil claim in state District Court. On Dec. 8, Carlos Duarte and Nery Gramajo Alvarez filed such an action against Randy Trujillo and Trujillo's Custom Woodworking.

Duarte and Alvarez claim they worked for Trujillo from June 2009 to September 2010, but were paid sporadically and at a rate less than either the state or city minimum wage, so they are owed at least $18,000.

Trujillo's business phone number has been disconnected.

Not everyone, of course, loves the "living wage."

"Every time they raise the 'living wage,' everything else goes up," said Simone Koutsouflakis, owner of Old West Signs, 7512 Avenger Way. "I just do not understand why they can't bring the price of living down here."

Koutsouflakis said his sign-making business used to employ four people, then two and now he has only a single employee he pays $12 an hour.

"We're struggling," he said. "This has not been the best year — 2011 was horrid — and this is just another nail in the coffin trying to stay alive. I don't think I'd even complain this much if it was like in '07, '06 when things were great, but things aren't great and it's just weird."

Koutsouflakis said that when he has interviewed job applicants he has often found that applicants come from Albuquerque because they know Santa Fe pays more. This includes "people that shouldn't even be making minimum wage because they just don't have any good work history," he said.

Al Lucero, owner of Maria's New Mexican Kitchen, 555 W. Cordova Road, served on the "living wage" roundtable a decade ago. Lucero said Thursday he remains opposed to the minimum wage ordinance.

Lucero said he doesn't like calling it a "living wage." People earning wages for the first time, he said, "think that they're making a living wage and they have no incentive for them to improve their lot and do better.

"It's a minimum wage, and the thing I don't like about this minimum wage is that its mandated by the city. It insinuates that businesses don't pay enough money for their help in Santa Fe and that's not true."

Now that the minimum wage is rising to $10.29 an hour, Lucero said, the hospitality industry will be forced to overpay for entry-level positions.

"We're now going to be the highest minimum wage in the county," he said. "There's not enough jobs to go around the way it is and we're going to have a situation where this is going to make jobs go away. ...

"I want to get the City Council to consider freezing it at $10 an hour, but I know they won't do it because its unpopular and they're afraid of that minority out there that will yell and scream at them. Yet businesses are going down like mad."

Contact Tom Sharpe at 986-3080 or tsharpe@sfnewmexican.com.