Views differ on wage increase

Earning an extra dollar an hour could mean loosening the pinch in a person's budget but it still no way to live, says Michael Hatch of Portales who's tired of living the paycheck-to-paycheck shuffle.

Hatch, 23, makes 33 cents over the state's $7.50 minimum wage as a convenience store employee. Hatch was a minimum wage earner not too long ago, but even at what he makes now, he feels his income limits him from the luxuries of life, and sometimes even the basics.

An extra dollar an hour may not provide those luxuries but Hatch said raising the state's minimum wage to $8.50, as proposed in Senate Bill 416 passed in the Senate, can certainly make quite a change for people.

Christina Calloway: Portales News-Tribune

Michael Hatch counts cigarettes on his shift at a Portales Allsup's Saturday. Hatch will be one of the many people across the state who could be affected by a proposed state minimum wage change from $7.50 to $8.50.

"A little bit is better than nothing," Hatch said. "You just have to keep on going with that extra money."

The bill was sponsored by Sen. Richard Martinez, D-Espanola, and passed the Senate in a 25-17 party-line vote, with Democrats voting in favor.

The bill moves on to the Democrat-controlled House, but some political pundits say if it passes the House, there may be a challenge getting Republican Gov. Susana Martinez to sign the bill before it could become law.

Eastern New Mexico University professor of finance David Hemley, who spent years working in the private sector, says if this bill becomes law, it will increase the cost of doing business in the state and increase unemployment as well as underemployment.

"If they can't pass those costs onto the consumer, it's going to cut into the return," Hemley said.

He says the only way firms and businesses can beat those odds is by hiring more part-time workers so that they would be less likely to pay benefits.

"It will vary from industry to industry," Hemley said, adding that larger retail companies, such as Walmart, often employ more part-time workers to avoid those costs.

Hemley believes the only way to get paid more than minimum wage is to learn a skill, such as welding or engineering.

"There's a huge demand for people such as this," Hemley said. "The demand for accountants is unbelievable."

Hemley says the food and retail industries, which often hire a lot of unskilled labor and people with high school diplomas, will get hit the hardest by the possible wage change.

He added the work industry is in a technical phase and it's not going away soon.

Hemley's colleague at ENMU, Michael Snipes, assistant professor of economics, believes there will be a different result if the minimum wage is raised.

Rather than an increase in unemployment or businesses closing down, which Snipes says is a pretty well established implication in economics, he predicts the state will experience inflation.

Snipes said there was a study done on New Jersey when the state raised its minimum wage to see what type of economic effects took place.

"It wasn't unemployment that changed, it was the prices that changed," Snipes said.

He says businesses in this area most likely are already at the minimum workforce require to operate, so he doesn't see too many layoffs taking place, but he does believe that businesses will increase their costs to compensate.

He doesn't see the area experiencing too much of an inflation because he says it isn't likely people will change their spending behaviors too much, especially if they're already spending the minimum for necessities.

Roosevelt County Community Development Corporation Director Doug Redmond agrees that there is a loyalty locals have with small businesses.

"Large businesses are going to have to make adjustments in goods and services," Redmond said. "They'll cut hours back or cut positions to fit the minimum wage change."