Two $10.10 minimum wage bills were tabled in the New Mexico House Regulatory and Public Affairs Committee. With compelling testimony from the New Mexico Restaurant Association the committee voted to table both bills. There is still a bill in the Senate for an increase to $8.30 and rumors of more to come. NMRA will be there on your behalf! See below for a letter sent to the committee. Contact us with any questions or comments.
I was in Santa Fe Friday to testify on the minimum wage. I thought I would send you my thoughts on the minimum wage bills you are addressing today.
The Restaurant Association is proud that over one-third of the American public gets their first job in the restaurant industry. We are an industry of first jobs and opportunity. You can start in the dish room, and with hard work and dedication, end up in the boardroom. We are a labor-intensive business relying on people, not machines, to deliver our product. Restaurants are the last great service industry, everyone else has replaced their service personnel with kiosks. For this reason, mandated wage increases disproportionately affect our industry.
Minimum wage is not a “living wage” it is a training wage. Everyone remembers his or her first job, possibly in the restaurant industry. You likely made minimum wage. That first job taught you important things you didn’t learn in school (customer service, showing up on time, showering and presenting yourself well, counting change and making money). Most of you went on to get an education and more work experience and you eventually made more than minimum wage. Others worked hard and gained experience to move themselves out of the training wage.
It’s important to remember this first job experience as proponents of extreme mandated wages try to make you believe the minimum wage should be a “living wage”. Our industry hires many teens that honestly are expensive to train and do not need to “make a living”. They are supplementing their allowance with a part-time job. At some point, maybe $10.10, we will have to substitute the teen with a kiosk (less expensive to train and maintain). Then where will these kids get their first job experience?
$10.10 as a beginning wage is very difficult for small businesses to pay. It is a 26% increase in a major expense for businesses and can easily cost $162,000 in additional payroll for a small restaurant (40 employees X $2.60 X 30 hours a week X 52 weeks). Most restaurants don’t make that kind of money in a year.
In a recent survey of our members who experienced a minimum wage increase:
70% had to increase menu prices.
34% had to reduce benefits.
83% had to reduce the number of employees hours worked.
69% had to postpone hiring.
How is a worker better off making more money if everything costs more and their hours are reduced? How are our senior citizens, on fixed-incomes, better off when everything costs more? The proponents of minimum wage told us that increasing the wage in Albuquerque would put millions of dollars into the economy. If that is true, where is the money? We have yet to see the economic boon in Albuquerque form the wage increase.
The New Mexico Restaurant Association believes that minimum wage increases are not economically sound public policy but they are politically expedient and poll well with the public. We understand the political will for an increase. We ask that if you must pass an increase, be reasonable. $10.10 is not reasonable. We ask that you oppose both bills. We would also like to see a minimum wage bill that includes a preemption for setting wages and benefits only at the state level. I have model language for this preemption.
At your service,