(The Center Square) – The hourly minimum wage in New Mexico rose from $9 an hour to $10.50 on Jan. 1, an added cost that's difficult to maintain during the pandemic, according to the New Mexico Restaurant Association.
“While the New Mexico Restaurant Association supported the minimum wage increase when it passed,” Carol Wight, CEO of the association, told The Center Square in an email, “this year presents a very different business climate. Restaurants shutdowns in NM are to a greater degree than any other state in the country, and because of this, they are accumulating untenable debt.”
Bills for insurance, rent and utilities do not stop and the financial hardships are mounting, Wight said.
“They are facing bankruptcy and will struggle to reopen and rehire employees at a rate that increases their hiring costs,” she said.
Nationally, the economy lost 498,000 leisure and hospitality jobs in December and 3.9 million jobs since the pandemic began, according to the federal Bureau of Labor Statistics.
Tipped workers such as bartenders and servers do not earn the minimum wage. Instead, a tipped employee “customarily and regularly receives more than $30 per month in tips,” according to the federal Labor Department. Employers of tipped workers are “required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage (of $7.50 per hour). If workers’ tips combined with the employer's direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference.”
According to the New Mexico Department of Workforce Solutions, the minimum wage for tipped employees is $2.55 per hour, effective Jan. 1, versus $2.35 per hour a year earlier.
Currently in New Mexico, the COVID-19 guidelines and restrictions to slow the spread of the pandemic are on a county-by-county basis.
Pandemic guidelines and restrictions have pummeled leisure and hospitality employees and employers. A sharp drop on consumer demand drives a sales decline. The results have been layoffs, employee pay cuts and business closures.
Federal Paycheck Protection Program funds have helped some businesses to stay afloat, enabling them to pay employees during the restrictions. Some firms also tap the Economic Injury Disaster Loan.
Ernie C' de Baca is the president and CEO of the Albuquerque Hispano Chamber of Commerce.
“It’s a difficult time for small businesses,” he told The Center Square by phone. “We understand the multi-year phase-in of the minimum wage. We also understand the living wage.
“Yet adding more costs to businesses means adjustments elsewhere, such as cutting workers’ hours.”
On Jan. 1, 2022, the minimum wage in New Mexico is scheduled to climb to $11.50 an hour and to $12 hourly on New Year’s Day 2023.