Santa Fe Living Wage Baseline Study

130 Pages·2004·1.03 MB·English

SANTA FE LIVING WAGE

BASELINE STUDY

Reporting Baseline Data and Offering a Portrait of the
City of Santa Fe Economy

Prior to Implementation
of the Living Wage Ordinance

March 2004

UNIVERSITY OF NEW MEXICO

BUREAU OF BUSINESS AND

ECONOMIC RESEARCH
SANTA FE LIVING WAGE

BASELINE STUDY

Reporting Baseline Data and Offering a Portrait of the

City of Santa Fe Economy Prior to Implementation

of the Living Wage Ordinance

March 2004

Dr. Lee A. Reynis

UNIVERSITY OF NEW MEXICO

BUREAU OF BUSINESS AND
ECONOMIC RESEARCH
TABLE OF CONTENTS

ACKNOWLEDGEMENTS................................................................................................ I
EXECUTIVE SUMMARY ............................................................................................... III

1. ASSESSING THE IMPACT OF THE CITY OF SANTA FE LIVING WAGE ............... 1
Introduction ..................................................................................................................... 1
Potential Effects of Mandating a Living Wage ................................................................. 2
Baseline on the City of Santa Fe Economy ..................................................................... 9

2. CITY OF SANTA FE: DEMOGRAPHICS, LABOR FORCE, INCOME AND
POVERTY, COST OF LIVING, AND HOUSING........................................................... 11
Population and Demographics ...................................................................................... 11
Labor Force................................................................................................................... 13
Income and Poverty ...................................................................................................... 16
Cost of Living ................................................................................................................ 21
Housing in the City of Santa Fe and Surrounding Area................................................. 23

3. CITY OF SANTA FE ECONOMY.............................................................................. 31
Employment and Earnings ............................................................................................ 31
Proprietors and Non-Employers .................................................................................... 42
Gross Receipts Tax Base.............................................................................................. 44

4. WHO ARE THE LOW WAGE WORKERS IN THE CITY OF SANTA FE?............... 49
Demographic Characteristics ........................................................................................ 49
Low Wage Occupations ................................................................................................ 50
Low Wage Industries..................................................................................................... 51
Findings from Survey of City of Santa Fe Businesses................................................... 53
Findings from Worker Focus Groups............................................................................. 56

5. CASE STUDIES........................................................................................................ 59
Santa Fe’s Hospitality Industry...................................................................................... 59
Retail Trade................................................................................................................... 71

WORKS CONSULTED ................................................................................................. 75

APPENDIX A HISTORY OF THE FEDERAL MINIMUM WAGE ................................. 81
APPENDIX B SUMMARY OF EMPLOYER AND EMPLOYEE FEEDBACK FROM
FOCUS GROUPS ......................................................................................................... 83
APPENDIX C BARE BONES BUDGET FOR SANTA FE........................................... 97
APPENDIX D SURVEY OF SANTA FE BUSINESSES............................................. 101
APPENDIX E 1997 ECONOMIC CENSUS RATIOS FOR THE CITY OF SANTA FE109
APPENDIX F SANTA FE COUNTY NON-EMPLOYERS .......................................... 111
ACKNOWLEDGEMENTS

This report has been an effort by many people. On BBER staff, I would like to thank
Jeff Mitchell for putting together the literature review, taking the lead on the cost of living
survey and assisting with other pieces of the research. Rick Zimmerman worked with
one of our student research assistants Betty King to put together the material on
housing. Tony Sylvester provided invaluable assistance at all stages. Tony organized
student researchers to pull together Bureau of the Census data on the population and
demographics (decennial censuses) and on businesses (Economic Census, County
Business Patterns), and prepared narrative based on this research. Tony also provided
critical input into the design of the focus groups and in editing the final document.
Norton Francis, Dolores Busch, and student Nafisa Halim provided assistance in setting
up the large administrative databases for analysis. Guy Dameron, Dolores Busch and
student researcher Billy Ulibarri together took responsibility for administering the
business survey, cleaning and coding responses, and analyzing survey results. Our
administrator Mike Byrnes was there when we need him, allowing the research effort to
proceed. Myra Segal succeeded in holding 2 focus groups with members of the
business community and 3 focus groups with low wage workers, including one session
that was held in Spanish. Students Elvira Lopez and Martha Napoles-Baca conducted
the focus group with Spanish-speaking workers. Elivira and Bill Ulibarri spent hours on
the phone setting up the focus groups under Myra’s direction. Students Julian Baca
and Betty King proved to be able research assistance in mining secondary data
sources. Colette Smith and Marie Martinez helped with research and also with
document production.

The research effort on this project was given a major boost by having access to New
Mexico Department of Labor administrative records under a formal contractual
agreement. Special thanks go to Gerry Bradley, Chief of the Economic Research Unit
at the Department of Labor, for making this possible and to Michelle Duran of his staff,
for providing us with the data in electronic form and patiently answering our many
questions.

There are many people who assisted by providing us with contacts or patiently
answering our questions. Among them, Carol Oppenheimer and Morty Simon were
very helpful in giving us contacts within the labor and social service communities
through which we were able to identify a diverse group of low-wage employees willing to
participate in focus groups. We also wish to thank Jerry Easley, President, Santa Fe
Chamber of Commerce, and David Kaseman of the Santa Fe Alliance, both of whom
met with us, shared their insights, helped us identify business people to be included in
our focus groups, and reviewed our survey instrument. We also very much appreciated
the time business people and employees took to participate in our focus groups and the
time that business people took to fill out and return our business survey.

Finally, I wish to thank the members of the City Council who pushed to have this study
done and those who met with me, some on more than one occasion, to share their
ideas and concerns. City Manager Jim Romero helped to facilitate these meetings and
i
to manage the contract. Until he left, Arturo Rodriguez was my main point of contact,
then Steve Whitman, followed by Terry Lopez. A special thank you to all three of these
people, each of whom helped in their own way to move things along.

In thanking the many people who helped with this report, I must take responsibility for
the final content, including any errors. We have tried to present the information
objectively. Others may draw conclusions from what is written. I believe we have
documented some problems that exist in Santa Fe today. Whether a living wage is the
best way to address these problems is another question. If the ordinance survives the
current legal challenges, we have assembled baseline data that can be used in doing a
thorough analysis of the impacts.
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EXECUTIVE SUMMARY
SANTA FE LIVING WAGE STUDY

On February 27, 2003, the Santa Fe City Council passed an ordinance mandating a phased-in
living wage for all people working at private sector businesses with 25 or more employees. The
ordinance was scheduled to go into effect January 1, 2004, when the minimum hourly wage for
workers in these larger private establishments would be $8.50, inclusive of tips and any
employer contributions toward health insurance and/or toward the provision of day care.i On
January 1, 2006, the minimum wage for businesses with 25 or more employees would be
increased to $9.50 (plus inflation), with a further increase to $10.50 (plus inflation) effective
January 1, 2008.

What impact will the living wage ordinance have on the City of Santa Fe economy, on
local businesses, on workers and residents, and on the City budget – on revenues, on
the demand for City programs and services? This study is a baseline study of the
Santa Fe economy prior to implementation. The goal has been to paint an accurate
picture of the Santa Fe economy today and to collect data today that will be critical in
the future to a thorough analysis of the actual impacts of the ordinance.

Potential impacts of the living wage include those on employment and particularly
employment of lower skill workers, on wage levels and the structure of wages, on skill
development and acquisition, on the cost of living and the cost of doing business, on
business competitiveness and business investment, on the distribution of income, the
problem of poverty the cost and efficacy of anti-poverty programs.

Baseline: Demographics, Labor Force, Income and Poverty, Cost of Living,
Housing

The City of Santa Fe nestled at over 7,000 feet against the magnificent Sangre de
Cristo Mountains is a place of scenic beauty, of historic significance, of rich cultural
traditions, a center for the arts, and a gateway both to the pueblos and historic Hispanic
villages of northern NM and to an abundance of recreational opportunities. Santa Fe is
a multi-cultural city, with a large Hispanic/Latino population (48%). In terms of race,
76% of the residents in 2000 identified as White Only, 2.2% as Native American, 2.1 as
Black, Asian or Pacific Islander and 15% as some other race. Santa Fe is a world-
class tourist destination and it continues to attract the more affluent visitors. The
luxurious homes that dot the foothills and residential real estate prices attest to the
City’s attractiveness to amenity migrants, a number of whom have built vacation and
retirement home in the area. The City of Santa Fe has an older population (50% were
40 or older in 2000 versus 42% nationally) and population growth within the City limits
(11% over the decade of the 1990’s) has been much slower than in the areas
surrounding the City.

i The federal minimum wage was last increased to $5.15 on September 1, 1997. Had the federal
minimum wage been increased regularly with inflation since 1968, the federal minimum wage today would
be $8.51.
iii
Santa Fe County is one of only two counties in the state where per capita income
exceeds the national average. Dividends, interest, and rent per capita in the County are
50% higher than in the US as a whole. City of Santa Fe households with income of
$200,000 or more in 1999 accounted for a larger percent of City aggregate income –
16.6% versus 15.1% nationwide. Educational attainment for the population 25 and
older is very high, with 18% having a masters, a doctorate or a professional degree
versus less than 9% nationwide.

There is, however, another side to Santa Fe. While per capita income exceeds the
national average, the average wage per employee is 80% of the US. Despite having
relatively more people in the highest income category, median income is lower --
$40,392 versus $41,994 for the US in 1999. Moreover, median earnings for households
with a White Non-Hispanic head are roughly a third higher than for those headed by a
Hispanic/Latino. The City has far fewer households where the head in 65 or older with
income less than $20,000 but it has relatively more households with a head under 25 in
this situation. The overall poverty rate in the City is close to the national average but
the rates for families with children under 5 are much higher.

And while the overall educational attainment is high, in 1999 30% of the City’s Hispanic
population 25 years and older did not have a high school degree or equivalent (versus
4% of White Non-Hispanics) and only 15.4% had a college degree or more (versus 60%
of White Non-Hispanics).

Labor force participation has generally been higher for both men and women living in
the City of Santa Fe than for their counterparts elsewhere, and unemployment rates
have been lower. However, both male and female Hispanics/Latinos had lower rates of
labor force participation in 1999 than Non-Hispanic Whites and their rates of
unemployment were almost twice as high. Compared to the US in 1999, a smaller
percentage of the workers residing in the City of Santa Fe worked full-time and a larger
percent of the men work part-time year round.

The problems of unemployment, of part-time work and low pay are compounded by the
high cost of living. As of July 2003, the cost of living in Santa Fe exceeded the national
average by 13.0 percent. Costs were above the national average in nearly every
category but most significantly for housing. According to a report issued in July 2003
by Voices for Children, the calculated “bare bones budget” for a two-adult two-child
family, with one of the children an infant, living in Santa Fe is $37,376. This budget
would require one parent working for $18 per hour to work full-time year-round full-time,
although it could be achieved with both parents making $9 per hour and each putting in
2080 hours annually.

The lack of affordable housing is the other side of the real estate boom that has driven
housing prices into the stratosphere. In 1999, 26% of City of Santa Fe owner-occupied
households and 44% of renting households were paying 30% or more of household
income toward shelter costs. According to the 2001 Survey of the Santa Fe Rental
Market, 33% of Santa Fe renters could not afford a one-bedroom apartment, 40% could
iv