Businesses anticipate wage raise

A $1 rise in the New Mexico minimum wage taking effect in about a week has local business owners scrambling to find ways to make up the difference.

On January 1, the state mandated minimum wage increases from $6.50 per hour to $7.50 per hour.

Tom Martin, the owner of Portales and Clovis Taco Box restaurants, says recent steady increases in the state minimum wage in the last several years will cost his company about a quarter of a million dollars annually.

Since 2006, the minimum wage in New Mexico has risen more than $2 per hour — up from $5.15 per hour in 2006 to $7.50 per hour, the new rate.

“There’s no way that we come anywhere near making that much,” Martin said. “We have to do what we feel is necessary to compensate.”

Of the states that have minimum wage requirements separate from the federal law, New Mexico ranks ninth with the new, higher minimum wage.

“I don’t think anybody wants anybody to not make money,” Martin said. “But what we run into is that (the minimum wage increase) forces us to make the necessary adjustments.”

According to Martin, those adjustments include cutting hours, not hiring, having fewer people on the payroll and raising prices. Martin does, however, see the benefit of such a change.

“I will admit that it has helped make us sharper businessmen and business women,” he said. “We know we can’t pass everything on to the consumer, so it really has made us sharper. But on the other hand, there’s just so much sharpening of the pencil that you can do.”

Chris Bryant has owned Clovis’ Foxy Drive-In for 35 years, and out of Bryant’s 21 employees, he expects about 80 percent of his workers to be affected by the new rate.

“It’s kind of a tough time, but it’s the law and we’re going to have to abide by it,” Bryant said. “We’re going to have to make some changes to make things work for not only us, but also our customers. We don’t want to raise prices unless it’s absolutely necessary.”

Bryant doesn’t expect to have to lay anybody off, but does expect to raise prices in order to meet the new wage.

“The good part is, it gives our employees a little bit extra cash in order to meet their living expenses and it helps their families out as well,” Bryant said.

The federal minimum wage currently sits at $6.55 per hour, but will begin to catch up with the new New Mexico rate in July 2009, as the federal rate increases to $7.25 per hour.

“You don’t want to cut your labor force, you don’t want to cut your hours, you don’t want to raise your prices, but these are things that we are forced to do,” Martin said.