Washington/Idaho situation provides insight into New Mexico’s minimum wage increase debate

As New Mexico’s Legislature prepares to debate a minimum wage increase proposal that died last year primarily because of a fight over concerns raised by Doña Ana County’s Democratic lawmakers, an article in today’s New York Times has some interesting insight into the topic.

Lawmakers from this area, most of them Democrats, have argued that Doña Ana County is unique in the state because some of the towns in the southern part of the county actually span both sides of the Texas-New Mexico border. That doesn’t mean they opposed the wage increase, but they raised many questions and argued many points in an attempt to find compromise that meant the Legislature failed to resolve the issue in the 30-day 2006 session.

Why would a business stay in Anthony, New Mexico and pay workers $7.50 per hour, some of the legislators asked, when it could move a few blocks and pay workers $5.15 per hour?

Similar arguments were made almost a decade ago in Liberty Lake, Washington, when that state approved a phased minimum wage increase that means businesses now have to pay almost $8 per hour.

Eight miles away, in Post Falls, Idaho, the minimum wage remains at $5.15 per hour, the federal standard.

Instead of harming businesses on the Washington side of the state line, the Times reported, the discrepancy has pushed businesses in Idaho to raise wages because their teens and other workers are crossing the state line to work in fast-food restaurants that pay more. Business is Washington remains good, the newspaper reported.

The newspaper profiled the owner of a Papa Murphy’s restaurant in Liberty Lake who said he is paying higher wages than ever before, but business has grown by more than 11 percent in the last year. Both states, the Times notes, are among the nation’s leaders in growth of jobs and personal income.

A restaurant owner in Idaho said he pays more than the minimum wage to workers because he could not find anyone to work for the minimum at his cafe.

“At $5.15 an hour, I get zero applicants – or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Hot Rod Cafe owner Rob Elder told the Times.

People in Washington who opposed the increase and said it would send jobs and businesses to Idaho are no longer fighting it, the Times reported.

Another Washington business owner, John Fazzari, who owns a pizza restaurant minutes away from a town in Idaho, said business is better than it’s ever been. He said he has had to raise prices slightly to compensate for the wage increase, but customers have not complained and business has grown.

State debate may not matter

The New Mexico Legislature will take up the issue this year and likely work out a compromise that will be signed into law, but the debate may not matter. On a vote of 315-116, the U.S. House passed a bill Wednesday raising the federal minimum wage to $7.25 per hour over two years. Though the Senate has not yet taken it up, President Bush has said he’ll sign it if it takes into account the concerns of small-business owners.

Among representatives from New Mexico, Tom Udall, a Democrat, and Heather Wilson, a Republican, voted for the increase. Rep. Steve Pearce, a Republican, voted against it.

The measure would raise the minimum wage to $5.85 per hour 60 days after it is enacted and to $6.55 one year later. Another year after that, it would go up to $7.25.

“Raising the minimum wage is the first step to a stronger economy for all Americans,” Udall said in a news release. “Our action today will make a real difference in the lives of America’s working families.”

Pearce said in a news release that the legislation doesn’t include enough protection for small businesses. He was among a group of Republicans who sought to have the matter referred to a committee for further scrutiny, but that did not happen.

“We have an obligation to help working Americans improve their lives. Doing so includes increasing the minimum wage, but not in a ham-handed manner that kills jobs,” Pearce said. “Once again, the majority’s refusal to utilize the normal process of committee consideration and floor amendment has prevented us from reaching a reasonable, bipartisan compromise.”

Pearce pointed out that he voted along with many other House Republicans to increase the minimum wage last year to $7.25 per hour. But that increase was tied to an unpopular estate tax change that Senate Democrats and Republicans had blocked and called irresponsible.

Most saw approval of that legislation by House Republicans as a political stunt either designed to silence the minimum wage debate in advance of the November election or as an attempt to get the estate-tax change approved by the Senate.

It succeeded in taking the minimum wage debate off the table until Democrats took control the House on Jan. 1.

A prior version of this posting incorrectly stated that Doña Ana County Democrats opposed the increase in 2006.