Aaron Yelowitz joined Street Signs host Erin Burnett and Santa Fe Mayor David Coss to discuss Santa Fe's citywide minimum-wage ordinance and competing interpretations of the city's employment data.
Participants
- Erin Burnett: Host
- David Coss: Mayor of Santa Fe, New Mexico
- Aaron Yelowitz: Associate Professor of Economics, University of Kentucky
Related research
The estimate of approximately 540 jobs discussed in the segment appears in the September 2005 report. The December 2005 report expanded that analysis.
Transcript
00:00:00 — Erin Burnett: When a city raises the minimum wage over the objections of businesses—two years ago, Santa Fe, New Mexico, boosted its minimum wage. They're calling it a living wage, to be specific. Workers there now make at least $9.50 an hour, and that could go up another dollar, to $10.50, by 2008.
Joining us to debate it: the mayor of Santa Fe, David Coss, who worked to pass the minimum-wage increase, and Aaron Yelowitz, a professor at the University of Kentucky. He studied the new wage law in San Francisco and says it's not working out as well as planned. Gentlemen, we appreciate both of you joining us to debate this.
Mayor Coss, let me start with you. Why—just give me in a nutshell—do you believe the living wage of $9.50 an hour in Santa Fe is working?
00:00:42 — David Coss: Well, I think all the data that we see show that it's working. You start with: it was the right thing to do. The federal minimum wage was just totally inadequate for working families in Santa Fe. We raised it to $8.50; this year it went to $9.50. We've been doing very careful studies of the impacts of the $9.50 on our economy, and the data so far show that our economy is doing great. It's doing well in Santa Fe. Job growth, especially in the service sector, where the living wage was expected to have the greatest impact, has actually been strong.
And so I think we've seen pretty much positive effects from having working families have better incomes in Santa Fe from this ordinance.
00:01:34 — Erin Burnett: Dr. Yelowitz, what's your response? Mayor Coss has some points here. When you look at the unemployment rate in Santa Fe specifically, last year it fell to 4 percent from 4.5 percent. The city, according to the New Mexico Department of Labor, added about 1,500 jobs last year alone.
00:01:52 — Aaron Yelowitz: The key problem with Mayor Coss's comparisons is that he's comparing Santa Fe to nothing else. The key problem with that is that other factors, like the economy, are also growing at the same time. In my work, I've compared Santa Fe to other major cities in New Mexico. When you compare Santa Fe with those other major cities, what you find is that Santa Fe's job market actually got worse due to the living-wage ordinance.
What I find is that there were around 540 jobs that were lost, directly attributable to the living-wage ordinance. Most unfortunate is that those job losses occurred among the least-skilled workers—those with a high-school education or less.
00:02:34 — Erin Burnett: Mayor Coss, that's what we're seeing. When you look here, it does appear that some of the big companies that used to have a presence in Santa Fe—the Gap and Toys “R” Us—have closed stores in the city. We're hearing they're moving just about 20 miles outside the city line to try to avoid these higher wages.
00:02:49 — David Coss: I don't think they're moving 20 miles out. Frankly, we don't miss the Gap or Toys “R” Us. We have a Walmart Supercenter struggling to come into Santa Fe and promising to abide by the living wage. I think when we compare our job growth, our unemployment rate, and our rate of economic growth with cities in New Mexico—be they Albuquerque, Las Cruces, or Farmington—we're doing well, and we're competing well in terms of economic development with all of those communities.
00:03:22 — Erin Burnett: Mayor Coss and Dr. Yelowitz, we do appreciate both of you joining us. It's a fascinating debate. Before we go, just for viewers, I do want to make sure that we're clear: Toys “R” Us has responded to CNBC and said that the reason it left Santa Fe was not related to the living wage. We do want to make sure we clarify that for you.
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