This Sunday, New Mexico’s minimum wage is set to increase to $12.00 per hour or 50 cents more than the current wage. The new wage will be mandated beginning the first day of the New Year. Despite leftists using increases in the minimum wage to claim it is for social justice reasons, the increase will harm businesses and workers.
Mainstream TV station KOAT 7 even admits it, writing that the increase will result in “cut hours, automate tasks and demand more.”
The station interviewed an associate professor of finance at the University of New Mexico, Reilly White, who said, “As rates increase, that does help a lot of people employed at the minimum wage.” He added, “But, on the other side of it, it does interesting things, particularly to businesses.”
“White says it could also come at a cost to workers. He says some employers might reduce hours, demand more work out of their employees and automate some jobs like grocery store registers,” KOAT reported.
“It affects the types of people hired,” White said. “Another example is employers usually forgo hiring inexperienced workers like teenagers in favor of older, more experienced workers, making it harder for younger people to get a start in the market. So, it’s an interesting dynamic that affects a lot of different things across the workforce.”
New Mexico Senate Finance Chairman George Muñoz (D-Gallup), a business owner, criticized the wage increase, saying that despite him already paying his workers above the $12 new minimum wage, he is “worried about the future.”
“What’s the next thing? What are they going to tell us?” he said. “So they’re going to say, ‘Well, you know what, we need to do some price controls. We’re going to tell you how much you should charge for your burrito.’”
According to the IZA World of Labor, “minimum wages reduce employment among low-wage, low-skill workers. Second, minimum wages do a bad job of targeting poor and low-income families. Minimum wage laws mandate high wages for low-wage workers rather than higher earnings for low-income families.”
More companies are automating tasks and cutting staff due to increases in minimum wages, which decrease available jobs and force employers to cut back on critical investments in their businesses.