Minimum wage boost hits Tuesday

New Mexico employees working at minimum wage jobs will get a 65-cent pay raise Tuesday, but local business owners say the increase is likely to cause more problems than it solves.

The state minimum wage jumps to $6.50 an hour beginning Tuesday from the current federal minimum wage of $5.85. The federal minimum wage increases to $6.55 on July 24.

Randy Stansell, owner of Stansell’s Thriftway, said he doesn’t think the minimum wage increase will make much difference to employees.

“It seems like every time it goes up, everything else goes up, too,” he said.

Though he has few employees at minimum wage, Stansell said he has seen employees who took home less after a minimum wage increase because they moved into a higher tax bracket.

“It seems like inflation and taxes eat it up,” Stansell said.

Sen. Clint Harden, R-Clovis, owner of Twin Cronnie Drive-In, said the cost of increased wages is passed on to the consumer in the form of higher prices.

“Ultimately, it will be inflationary,” he said.

Harden said he voted in favor of the bill although he is against it in some ways.

“It’s always been my position minimum wage legislation should be federal,” he said.

It’s confusing for employers and employees to have a state minimum wage different than the federal minimum wage, he explained.

“It’s a government mandate that we’re going to have to deal with,” Harden added.

New Mexico’s minimum wage law was signed March 23 by Gov. Bill Richardson.

The state minimum wage goes up to $7.50 per hour Jan. 1, 2009, and the federal minimum wage goes up to $7.25 July 24, 2009.

The state bill exempts employees engaged in various agricultural and horticultural activities, including milk production, from the minimum wage, and provides some other exemptions.

The fiscal impact report for the state minimum wage law, prepared by the Legislative Finance Committee, estimates that 40,000 workers will be affected by the 2008 pay increase.