SANTA FE — The Santa Fe City Council voted on Wednesday to raise its minimum wage from $15 an hour to $17.50 in 2027, eliciting praise from workers’ rights advocates across the City Different.
But the calculation the municipality will use to determine future increases might be the bigger story, according to Reilly S. White, associate dean of teaching and learning and a tenured professor at the University of New Mexico.
“We investigated six different minimum wage scenarios,” White said in a phone interview Thursday. “The one proposed ended up being adopted and is based both on CPI, or Consumer Price Index, as well as the price of housing. That’s a novel approach because we typically see minimum wages across the country based on CPI alone.”
White said that, based on his research, Santa Fe is now the first city to account for the cost of housing when calculating minimum wage. The City of Santa Fe consulted with White on the new ordinance, which passed in a 5-2 vote late Wednesday night. Pilar Faulkner and Lee Garcia cast the two votes.
“I bring the perspective of actually owning and running a business and running a payroll,” Garcia, owner and operator of three Garcia Tires locations, told the Journal. “Every private business is different in how they have to operate. So it’s difficult when you do a mandate that, from my perspective, will just increase the costs. I feel like this will just hurt the same people we’re trying to help.”
City councilors voted after more than an hour of discussion, which partly centered around the new law’s terminology — specifically whether the term “living wage,” as originally proposed, or “minimum wage” should be used in the ordinance.
Mayor-elect Michael Garcia, who is a current city councilor for District 2, made the case that the pay increase might not be sufficiently high to call it a “living wage,” a change the governing body ultimately rejected.
Nonetheless, Garcia indicated that the ordinance is a step in the right direction.
“It is the responsibility of the City of Santa Fe to ensure that its workforce receives equitable and competitive wages,” he said in a statement. “In light of the increasingly high cost of living in our community, taking this step is essential to supporting our workforce, promoting stability, and upholding our commitment to a thriving and sustainable Santa Fe.” While most workers in the City Different will have to wait until 2027 for the increase to go into effect, Garcia introduced an amendment that will bring city employees under the $17.50 threshold up to the new standard starting Jan. 1, 2026.
Representatives from two local labor groups, Somos Un Pueblo Unido and Chainbreaker Collective, attended the council meeting and lauded the approval of the ordinance.
“Santa Fe took a decisive step toward fairness and dignity for every working family,” reads a statement from Somos Un Pueblo Unido. “With the passage of the minimum wage increase to $17.50 an hour, without carveouts or exclusions, our city has affirmed a simple but powerful truth: every worker deserves a wage that honors their labor and reflects the increasing cost of living in Santa Fe.”
Cathy Garcia, communications organizer for Chainbreaker Collective, said the ordinance’s consideration of skyrocketing rental costs in Santa Fe marks a critical evolution from the city’s prior living wage ordinance, which was passed in 2003.
“What Santa Fe has had since 2003 is an automatic increase,” she said Thursday. “It’s been based only on the CPI. Every year it just bumps up like 50 or 70 cents, just a little bit incremental. That’s what we’ve seen in these last 20 years, but basing it only on CPI has been wildly insufficient. Other municipalities across the country, they use CPI. Sometimes they use poverty metrics. This particular equation is including fair market rent, because it’s recognizing that rent in Santa Fe is particularly out of control.”
According to the City of Santa Fe, the previous local living wage was calculated based on the 12-month total increase of 2.76% in the Consumer Price Index for the Western Region for Urban Wage Earners and Clerical Workers. In 2024, for example, the calculation came out to $14.60 an hour.
Jill Dixon, executive director for The Food Depot, a food bank serving northern New Mexico, said rising costs this year and the recent federal government shutdown have increased pressure on food pantries across the region.
“What do systemic solutions really look like?” Dixon posed. “And what kinds of things do we need to advocate for in order to really address root causes? That fundamentally connects back to the cost of living crisis. People who are working, who are working very hard, who are working multiple jobs, simply can’t make ends meet, or right on the razor’s edge of needing the support of a food bank and our food pantries.”
Dixon and other proponents of the minimum wage increase communicated with outgoing Mayor Alan Webber about the needs they’ve seen firsthand among the populations they serve.
Webber sponsored Wednesday’s ordinance, which will be one of his final acts before Garcia takes office next year.
Opponents of the bill, predominantly local business owners, voiced their concerns at Wednesday night’s meeting, but White said the calculation used in the ordinance took into account the overall economic impact of raising the living wage.
“We don’t find evidence for significant employment effects following minimum wage,” he said. “How do employers respond? Sometimes employers might reduce hours for employees and that reduces costs. They might pass along some of the additional costs to consumers, but those end up being very, very small in comparison to the benefits that the workers get.” He emphasized that housing cost is the key factor in the new local law that should enable Santa Fe’s ordinance to make a meaningful difference in the lives of residents and the largest expense they face.
“Santa Fe is a very uniquely expensive real estate market in New Mexico, with a median home price of $600,000,” he said. “And two-bedroom rents, like the rest of the state, have undergone significant double-digit increases since the COVID years. That combination of factors is unique, and so this is an acknowledgement of housing being the most pertinent factor.”
min wage can be done on the city level??? that would be a great idea for mamdani
It’s been this way forever? Lmao San Francisco has had its own minimum wage since I’ve been working. Most cities in the Bay Area, CA have their own minimum wages. New York already has a minimum wage of $16.50/h, which is $1/h more than the state minimum wage.
That was one of his primary campaign promises…
City level minimum wage is not just perfectly possible and extremely normal and common to do, it’s also the best way to do it. It prevents way too high wages for rural towns and way too low for cities. Minimum wage is best done as tied to some set of prices in an area.
Rent can possibly run into some issues if landlords can raise minimum wage through their own choices… Not so sure rent is actually the best tie in practice. It’ll be interesting to see. I very much hope it works. If it doesn’t, I hope someone else does it again but with a more diverse basket of goods so to speak
That AND universal childcare!! Fuck yeah New Mexico.
The landlords are going to have a field day with this. Cha-ching.
It’s the exact same with 55+ communities and when social security goes up. Sure they can tie it to rent, but the problem is that the landlords will just siphon more out. It’s a very short sighted solution.
The next problem is corporate landlords charging so much for apartments.
This will, unfortunately, inflate rents even further – as much as I love the idea.
One of the only real ways to bring down rents and thereby leave more money in workers’ pockets in a meaningful way is to tax vacancies. Without doing something like that, these extra wages go right to the landlords.
Now we jack up rents to insane levels and all get rich!
LOL, see my comment! That’s exactly what will happen. Some of the small-time landlords will do the right thing, but this is free money to the soulless corporate home owners.
You misunderstand me.
We jack up rent to $30,000 a month so minimum wage goes up to $1000/hr.
Now everyone makes that or more so we can buy houses and raise rent to $300,000 a month and all make $10,000/hr and retire early.
If small business owners or franchises can’t exist in the new way of doing business than they go bankrupt and someone else takes over.
Let’s get this guy in front of a crowd.
Edit: Archive link
Much as I like this idea, it feels like this may backfire badly. They’d be better off doing things that would reduce the cost of housing, like building more housing.
Building more housing only reduces the cost of housing if you don’t allow all of it to be turned into air bnbs. We need to modernize zoning laws.
The air bnb issue is the real problem, if they banned air bnb in santa fe it only can benefit the city
It’s not air BNB itself that’s the issue. I don’t see much problem if you have a second house through inheritance or whatever you rent it out. I think the bigger problem we are facing is corporate landlords, limiting personal and corporate ability to own more than a few properties would solve more issues.
A major part of it is not just corporate ownership, but also lack of supply of condos as an alternative to houses. Pushes houses prices up. Pushes rent up because people don’t have any options to compete with apartment rents
This is a really good thing, it just doesn’t go far enough.
If minimum wage is tied to cost of living it reduces the incentive to price gouge.
Which is something Santa Fe is in particular need of, since they have an extremely restrictive ordinance on housing development.
Small business and franchises will be unable to afford more employees. Lemmy thinks these business owners are all rich. No, they can’t just hire more people.
Dug around one night looking at McDonald’s and franchising. You can expect a meager $50K your first year, $90K after that. No way in hell I’m putting in the hours and hassle of running a business, with a couple of dozen employees to care for, when I was making $83K sitting at home playing sysadmin. BTW, that $90K doesn’t include accounting and payroll, you on your own.
Min wage here is $15, so the employer cost is likely around $22. Even if the owner takes $0 pay, they could hire a whopping 2 employees.
Landlords will jack the rates knowing that their renters will make more and more money. This law funnels money from Main Street to corporate landlords. They’re punishing the good guys, incentivizing the bad guys, and minimum wage employees get squeezed from both ends.
SOURCE: Was a sysadmin for a payroll firm and was deeply involved in all aspects of the business. Most of our clients were not well off and paid minimum wage or close enough.
EDIT: Forgot to add; This is a revenue neutral law for the city. If they want more housing that’s money out of the budget or tax incentives to builders, so less budget next year. Probably worth the temporary lower budget to get the community thriving and able to pay taxes. No idea on all that. 🤷🏻
That’s one of the many reasons why most people never started McDonald’s franchise and instead leave it to conglomerates.
For instance, with McDonald’s, all of the buildings are owned by McDonald’s, so you’re renting the building from them, you’re paying them the franchise fee, and you’re ordering through their distributors.
That being said, there are many franchises you can purchase into that do not have nearly the same hurdles for income.
Yas queen.
