The Washington PostDemocracy Dies in Darkness

Santa Fe hiked worker pay. What happened next is … unclear.

Ana Garcia plays with her 3-year-old nephew Adrian just before leaving to go to work at Blake’s Lotaburger on July 29. In the background are her sister, Jessica Arreola, her brother-in-law, Luis Contreras, and her daughter, Mareli. (Photos by Steven St. John for The Washington Post)
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SANTA FE, N.M. — Do not come to this city 10 years after it started requiring business owners to pay their workers more and think it holds irrefutable evidence that the move was either a boon or a disaster. Economists who studied the wage hike here in its first critical years say its impact was barely detectable, absorbed by the larger economy. Teasing out cause and effect amid small sample sizes, incompatible data sets and the vast, moving machinery of the market proved difficult.

In the language of the studies: “There are, of course, many reasons why this indicator might go up.”

Or down.

The answer is unsatisfying. Too much nuance for the larger political landscape in which the dial has been replaced by a switch. On or off. Good or bad. Helps or hurts. President Obama urges Congress to raise the county’s current minimum wage from $7.25 an hour to $10.10 and up pop economists, chambers of commerce, restaurant associations and labor unions, each referring to various studies of varying conclusions. Ideology is a potent filter.

In this historic capital of 70,000 people, 10 years has brought a stalemate. Has the city’s living wage — now at $10.66 an hour — been an overall benefit? Absolutely. Not at all. Sometimes. Maybe. It depends. It’s complicated.

Since the rollout of a living wage in The City Different, not a whole lot is. At least not in the big picture. The unemployment rate stays where it always stays, lower than the rest of New Mexico. Gross sales tax receipts have climbed back out of the trough of recession. The number of new business licenses issued rises and falls, rises and falls, never far from about 600 a year. The number of people working in the area’s leisure and hospitality sector, where the bulk of low-wage workers are employed, remains steady. No one has done a recent study to see what’s happened with food stamp and public assistance caseloads, but early data seemed to indicate mixed results — none of which could be directly tied to an increase in minimum wage.

Good, bad or otherwise, surrounding Santa Fe County has just followed the city’s lead, bumping its minimum wage by more than $3 an hour to match the city’s $10.66 with annual cost-of-living increases. In Albuquerque, the state’s largest city and an hour’s drive south, wages rose this year to $8.60 an hour. All three ordinances, in some way or another, count health- or child-care benefits as credit toward the minimum. All three also have provisions to ensure that those who work for tips or commission make at least the minimum wage.

“One of the lessons learned is that the sky didn’t fall,” Mayor Javier Gonzales says. “The doom and gloom that was predicted never came to be.  . . . But the living wage is not a silver bullet, either. It’s not a quick fix and it alone won’t save the economy.”


Santa Fe’s wage is the second-highest city minimum wage in the land after San Francisco. (Seattle eventually will surpass both with its phased-in $15-an-hour minimum.) In 2004, when Santa Fe’s ordinance went into effect, the pay for certain low-wage workers jumped from $5.15 an hour to $8.50 an hour — a 65 percent raise. It was, according to an early study, the largest one-time increase in the minimum wage in the country.

The ordinance since has evolved. What began with city workers and contractors in 2002 expanded to private businesses with 25 or more employees in 2004, which led “to a lot of games being played by business,” says Lee Reynis, director of the Bureau of Business and Economic Research at the University of New Mexico, which has done the most in-depth study of Santa Fe’s wage. (Employment thresholds invite end-runs — sometimes at the cost of part-time workers. There’s a hard-earned lesson.) In 2007, a compromise extended the ordinance’s reach to all businesses within the city and tied the raises to the West Region Consumer Price Index rather than larger, fixed increases. The local  Chamber of Commerce, seeking a wage cap, has not stopped seeking a chink in the nearly seamless armor of a progressive City Council since.

The emotion that attended the city’s first debates about the living wage long ago dissipated. The battle goes on quietly, fought now on the field of anecdote.

Stories circulate of people now being able to work fewer jobs, to spend more time with their families, of workers coming in from other parts of the state where the wage can be more than $3 an hour less. Also heard: Businesses cut overtime, cut benefits, closed, located elsewhere, raised prices on customers. Nonprofits that helped disabled adults were demonstrably hard hit, finding that employers wanted “more bang for their buck.” The most ominous view sees an exodus of high school students leaving the books behind, sapped of aspiration, because $10.66 with a guaranteed annual cost-of-living raise seems like a pretty good deal. A 2007 BBER study, its last comprehensive overview of the impact of the wage, examined this question and reported that the data on dropouts and why they leave school “are simply not good enough.”

Mayor Gonzales, new to the office, sits in the art-filled lobby of La Fonda hotel, describing the living wage as both a moral obligation and an economic imperative. The chairman of the board of the hotel, passing by, greets him cordially and says: “The living wage hurts business in Santa Fe. I know you don’t want to hear that, but it does.” She tells him of a multimillion-dollar renovation project at the hotel that went to contractors from Albuquerque. Local contractors, saddled with higher labor costs, couldn’t compete, she says. Then she dashes off to a meeting.

After she leaves, he shakes his head. “There is a still a belief among business that, ‘Oh, it’s the higher labor rate that’s making us lose business to Albuquerque.’ It’s an easy thing to say and a hard thing to prove.”


It’s not clear how many workers have been directly affected by the wage ordinance, much less how many received a bump when that entry-level hire changing sheets next to them walked in the door earning more than they were. In 2004, BBER calculated that roughly 9,000 people worked in occupations where entry-level wages were less than $8.50 an hour.

Santa Fe is dependent upon tourism. Then and now, its low-wage workers tend to be concentrated in retail and the city’s vital hospitality industry — food and accommodations. Many are young people working part-time jobs. They share apartments, rely on public assistance, work more than one job and did not or do not intend to remain in their jobs as cashiers, teaching assistants, home health aides, child care workers, cafeteria cooks, janitors, maids. Most are women or Hispanic men. In a city where half the residents are Latino — many whose families have been here for generations — Hispanic men are 2½ times more likely than their white non-Hispanic counterparts to be earning minimum wage or less, according to a BBER study.

The city of the postcard downtown plaza, of Navajo and Pueblo artisans laying jewelry for sale at the feet of tourists who shuffle by in long, thick columns of disposable income, of the opera and the chamber music festival and art galleries and fine restaurants, that’s one Santa Fe.

“But there are two Santa Fes,” says former city council member Frank Montaño, one of the councilors widely credited for laying the groundwork for the city’s living-wage ordinance. “And those two Santa Fes are like night and day.”

The other is the Santa Fe where 30 percent of children live in poverty, where the poverty rate for Hispanics is double that of white non-Hispanics, and where, according to the most recent U.S. Census Bureau estimates, roughly 54 percent of the Hispanic population 25 or older never attended college.

It’s the Santa Fe where housekeeping supervisor Betty Quintero helps fold towels in the hot and fragrant air of a hotel laundry room.

“We talk about this all the time,” Quintero says. “We were looking so forward to it when it was coming. I thought, ‘Oh, how exciting. There is going to be a big difference.’” She shrugs. “The pay went up. The rent went up. The food went up. I make more than minimum wage and I’m still struggling. . . . In all honesty, it’s upsetting because everyone always says, ‘Oh, the minimum wage is great there.’ No, it’s not. You still can’t break even.”

What no one disputes is that the living wage has served to sharpen the focus on underlying structural issues: the high cost of living, a severe lack of affordable housing, a struggling public school system, an economy heavily reliant upon the recession-vulnerable tourism and government sectors, a city where half the workforce lives somewhere else.

For now, change happens minutely, in tiny steps that one day may add up to something. Ana Garcia counts them this way: the new plasma TV in the living room of the mobile home she and her husband finally saved enough money to buy three months ago; the tiny yard where they put a slide for their children, the living-room and bedroom sets they are eyeing — the first furniture that will not be rent-to-own.

“We never actually bought something that we knew was going to be ours,” she says.

Garcia is 22 and works for Blake’s Lotaburger, a New Mexico company that made its name with its green chile cheeseburger. Before that she worked as a server in a home for seniors. Her husband is a landscaper who earn about $12 an hour.

Several months ago, Ana called her younger sister, Jessica, who was working for $7 an hour at a McDonalds in North Carolina. “You need to come out here,” she told her. “You’ll make, like, almost $11 an hour.”

And so Jessica  did. She works at McDonalds and she and her son live with Ana, her husband and their two sons in their new three-bedroom, two-bath mobile home on the south side of town.