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A proposed ordinance up for final action at Monday's sa国际传媒官网网页入口 City Council meeting would raise the minimum wage by $3 in 2027 and set in place an annual cost of living adjustment 鈥� tied to both housing costs and inflation 鈥� to begin in 2028.

The measure, sponsored by Councilors Tammy Fiebelkorn, Joaquin Baca, Nichole Rogers and Stephanie Telles, would raise the minimum wage to $15 an hour and $14 for employees who receive at least $2,500 in healthcare and/or childcare benefits.

The ordinance would raise the pay of tipped employees to $9 an hour.

The bill, like one recently passed in Santa Fe, would implement annual cost of living adjustments tied to the Consumer Price Index and Fair Market Rent 鈥� measured by the U.S. Department of Housing and Urban Development 鈥� for a two-bedroom home in sa国际传媒官网网页入口.

If passed, both the wage increase and the cost of living adjustments would follow Santa Fe's timeline on its $17 minimum wage, with the former starting in January and the latter in January 2028.

A local economist said the increases were not excessive, but the annual adjustments could create uncertainty for businesses. In a letter to the council, one local business leader said the panel was "fast-tracking" the decision and expressed concerns with the adjustments being tied to housing. 

Most of the council's sponsors could not be reached Saturday. 

Fiebelkorn, who crafted the ordinance over several months with Mayor Tim Keller's administration, called it a "middle ground" as she wanted to raise wages even higher, up to $20 an hour or more. She said, with the compromise, "we're not too dramatically impacting businesses, but we're also getting people the relief they need, and we're getting relief for taxpayers too.鈥�

Fiebelkorn said the income for minimum wage workers in sa国际传媒官网网页入口 is 20% less than the national average, while rents in the city are 25% more than the national average. 

鈥淩eally, let that sink in. 鈥� Two people working full-time jobs at minimum wage can't afford a two-bedroom apartment in our community, and that just doesn't make any sense,鈥� she said. 

Fiebelkorn said the sponsors tied the annual adjustments to both inflation and housing 鈥渢o have a realistic representation of what it costs to live in our community, and how those costs rise every year.鈥�

The ordinance states that the Fair Market Rate for a two-bedroom unit in sa国际传媒官网网页入口 increased 56% between 2021 and 2026, but the minimum wage has increased 26% in that same timeframe. Meanwhile, the 2024 sa国际传媒官网网页入口 Region Housing Needs Assessment found that 52% of all renters in sa国际传媒官网网页入口 are cost burdened 鈥� paying more than 30% of their income on housing.

Fiebelkorn said "people need help now" and she hoped the measure would pass Monday night,"so that folks know that come January 1, they have some relief coming."

Councilor Ren茅e Grout said the proposed ordinance "won鈥檛 raise anyone鈥檚 standard of living, but it will kill the small businesses that offer entry-level jobs."

"The real path to financial stability is upward mobility, and small local businesses offer those opportunities," she said in a statement. "If sa国际传媒官网网页入口 adopts a $15 per hour minimum wage, it will still take almost $20 per hour for a single person to afford a market rate studio apartment. Upward mobility gets people there; raising the minimum wage doesn鈥檛 even come close."

Councilor Dan Lewis, in a statement, called the increase "another misguided policy that ignores economic reality and threatens the small businesses that power sa国际传媒官网网页入口鈥檚 economy." He said strong opposition to the proposal from the Hispano Chamber, sa国际传媒官网网页入口 Chamber and New Mexico Restaurant Association "says it all." 

"Thousands of local employers and workers are warning that this proposal will hurt sa国际传媒官网网页入口鈥檚 economy. We should listen to the people creating jobs, not politicians pushing policies that risk destroying them," Lewis said.

Council President Klarissa Pe帽a said she would "leave comments to the sponsors."

Within reason, and uncertainty

Kelly O'Donnell, an economic consultant, said the proposed wage increases are reasonable and inline with the higher costs of goods and services.  

"It鈥檚 a meaningful increase that will make a very meaningful difference in the budgets of low-wage workers 鈥� but it's not so high that it will have a really negative impact on employment," she said.

O'Donnell said recent large-scale studies, including one in the past few years, have found that 鈥渕odest to moderate鈥� wage increases don't kill jobs the way the business world sometimes suggests. She said, while wage increases can lead to slightly slower job growth in certain sectors, they often have "an immediate positive stimulus" on the local economy that benefits businesses and workers.

鈥淚 think it will reduce turnover and will encourage folks to enter the workforce, so those are two big positives for business," she said. "The other thing is, it puts money in the pockets of workers who go out and spend their money at those businesses 鈥� so that money will flow back to many of these businesses.鈥�

O'Donnell said tying an annual cost of living increase to Fair Market Rent is more unique and she could see how businesses would have mixed feelings about that aspect. She said the FMR's "tend to be a little bit more volatile" than inflation, despite the former having gone up much faster than the latter in recent years.

In any case, while inflation is more steady and predictable in its movements, O'Donnell said housing costs take "bigger swings" in some years and don't change much at all in others. She said such a dynamic could lead to uncertainty for businesses, which often pay more attention to inflation.

鈥淚 understand the motivation, and it makes sense to me. On the other hand, I also understand why the business community might be a little uncomfortable with it,鈥� O'Donnell said. 鈥淚f you inject this higher, more volatile measure into how you're calculating growth for your minimum wage, you inject a little bit more uncertainty, and I think that, if anything, one of the important roles of government is to help provide a level of certainty and continuity for the economy.鈥�

In a letter to the City Council, Ernie C'deBaca, president and CEO of the sa国际传媒官网网页入口 Hispano Chamber of Commerce, asked members of the body to take their time. He said the chamber "supports fair wages and a thriving workforce," but the group also has to consider the challenges faced by small businesses.

C'deBaca said "fast-tracking a 25% increase" to the minimum wage was a concern and the proposed ordinance needed input from small businesses as they cannot absorb such increases like larger ones.

"These businesses are not large corporations with deep reserves," he said. "They are the most vulnerable when costs rise faster than revenue."

C'deBaca said tying annual adjustments to the Consumer Price Index and Fair Market Rate was also a concern. Should recent trends continue, he said, minimum wage would reach $26 an hour by 2037, adding that "policies that increase costs too quickly put their progress at risk."

"A 25% wage increase may sound simple on paper, but for many small and Hispanic-owned businesses, it could mean reduced hours, fewer jobs, higher prices, and in the worst cases, closure," he said. "鈥� Let鈥檚 make the right decision, not just a quick decision."