A minimum wage increase requires more careful consideration
In 1938, the United States Congress enacted the Fair Labor Standards Act, which established the second federal minimum wage of $0.25 an hour, guaranteed overtime pay for workers, ensured workplace safety requirements and banned child labor. Enacted on the heels of the Great Depression, its purpose was to not only establish basic protections for workers, but Congress also believed that it would stabilize the economy, which it did in many ways. The Act became the bedrock of future worker protections established throughout the 20th century, and yet the question of whether the minimum wage should be increased — by how much, or if at all — has remained one of the most contentious and complicated economic considerations in the United States at both the federal and state level.
Even among experts, there is little consensus regarding the effect of increasing the minimum wage, which is why no one currently elected, appointed or employed at the Town of Taos should be looking to establish a municipal minimum wage that differs from the state’s current rate of $12 an hour without engaging in extensive discussions and consultations with economic specialists first.
When our Home Rule commission began its work on drafting a charter earlier this year, it was only a matter of time before its members waded into dangerous territory, particularly because of how difficult it will be to alter the charter once it’s approved. In this case, the alarm came from the class of people who have long opposed raising the minimum wage, almost uniformly: Business owners, who argue that raising the minimum wage hurts the economy by increasing business expenses — forcing layoffs, business closures and price increases that drive up inflation. To their credit, many businesses do operate on razor-thin margins. On the other hand, when businesses are successful, their owners can make huge salaries, while their employees toil for a rate of pay that barely covers living expenses. Unfortunately, no employees spoke at last week’s meeting to illustrate this opposing view — that increasing the minimum wage ensures all employees stay out of poverty by keeping pace with the costs of living today, rather than at some point in the past, and regardless of the complexity of the labor they provide.
The ongoing disagreement between these two camps extends to the political level, which is why the federal minimum wage of $7.25 per hour hasn’t changed since 2009. If the federal rate took into account the rate of inflation and productivity gains since 1968, the minimum wage today would be $24 an hour, according to the Center for Economic and Policy Research. In the 13 states and Northern Mariana Islands that still pay the federal minimum wage, this means that business owners who pay this base rate to their employees are taking the difference from the people they employ and adding it to their bottom lines — an extremely unfair arrangement, to say the least.
Fortunately, most states have created their own minimum wage. New Mexico, for example, increased its wage from $11.50 per hour in 2022 to $12 on Jan. 1, although that still falls behind the $16.07 MIT’s Living Wage Calculator estimates a single person with no dependents ought to be making in this state to cover basic expenses.
If a minimum wage is to serve the purpose it was created for 85 years ago, then it must be updated periodically — perhaps even annually — to do so. Taos may very well benefit from control over its minimum wage, but a change with such far-reaching implications for our already tenuous small-town economy must be carefully considered and scrutinized by genuine experts before even a mention of it makes it into a charter.