More than 100,000 New Mexicans will see their pay increase starting in January now that Gov. Michelle Lujan Grisham has signed legislation to raise the state minimum wage.
“This is going to give hope and improve the quality of life” for New Mexicans at the bottom of the pay scale, the governor said Monday during a news conference at the Capitol.
Under the law, the state minimum wage of $7.50 an hour will rise to $9 on Jan. 1. Then the minimum wage will increase to $10.50 on Jan. 1, 2021; to $11.50 on Jan. 1, 2022; and top out at $12 on Jan. 1, 2023.
In addition, the law provides for implementing annual raises to the lower wage for tipped employees such as restaurant servers. Their base pay will also incrementally rise from $2.13 an hour to $3 an hour by Jan. 1, 2023.
Teenagers enrolled in high school also will be paid a lower minimum wage. It will be $8.50 an hour.
Lujan Grisham campaigned on raising the statewide minimum wage to $12 an hour by 2021. But that pitch stalled when lawmakers in the House of Representatives and the Senate clashed over competing proposals during the 60-day legislative session.
A compromise bill by Sen. Clemente Sanchez, D-Grants, for a minimum wage increase cleared both chambers late in the session.
The new law does not include cost-of-living increases once the minimum wage hits $12. But Lujan Grisham said she hoped legislators could add that feature to the law in coming years.
During debate on increasing the minimum wage, some lawmakers argued it would negatively impact small business owners in rural communities who may not be able to handle the raises without increasing prices and losing customers as a result.
Sanchez said time will tell whether the increase will hurt those businesspeople.
“But I think we’ll be fine,” he said. “I would not want legislation signed that would hurt small businesses.”
He joined the governor and Rep. Miguel Garcia, D-Albuquerque, for the bill signing ceremony. Garcia sponsored a competing measure that would have raised wages more quickly and would have raised the minimum pay for tipped workers to a higher level.
State Rep. Jack Chatfield, R-Mosquero, runs a small restaurant in his hometown. He said he fears the new law could cut profit margins and kill jobs.
Lujan Grisham said the salary increases will benefit those businesses because workers will invest the extra earnings into their communities.
“That money does go back into the [local] economy,” she said.
Lujan Grisham also said she is working to add pay increases for government workers making minimum wage to the state budget taking effect July 1. That way, she said, some 800 state workers will receive the pay increase six months earlier than scheduled. State government employs about 18,000 people.
The governor was surrounded Monday by representatives from a number of state advocacy groups, including New Mexico Voices for Children and the New Mexico Restaurant Association.
“We’re really pleased with how things ended up” said Carol Wight, executive director of New Mexico Restaurant Association. “We kept the tip wage intact, and that was very important to us.”
Garcia’s bill originally called for the elimination of the tipped wage. But under the bill that cleared the Legislature, servers will continue to receive this lower minimum wage. If their tips do not at least equal the regular minimum wage, their employer would pay them the difference.
Wight also said the bill that was signed will allow rural areas to implement the new pay scales methodically.
Three of the state’s largest cities, Santa Fe, Albuquerque and Las Cruces, already have minimum wages higher than the state level. Santa Fe’s is $11.80 an hour and it typically increases each March based on the cost of living.