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Wed May 14, 2014
Las Cruces Needs Minimum Wage Increase But By How Much
While workers say a minimum wage increase is long overdue –some business owners are concerned that too much of a wage increase will mean they’ll have to lay off staff, raise prices or even close down completely.
When Harry Kurgans is not working at Kohls - he is usually at home, sitting in front of his laptop trying to find a better job.
"Having not worked for some years- I was glad to get anything-just to get back in the work force” he says.
Before he came to Las Cruces Kurgans owned and operated a successful office coffee vending business. Which he sold, before working a string of salaried marketing jobs between L.A. and Chicago.
That was until the economy took a turn for the worst.
"When 911 hit the economy soured corporations starting cutting their budgets and the first thing that was usually cut was marketing, the people I was targeting as clients” he says.
Out of work and out of money Kurgans didn’t have many other options but to move in with his mom in Las Cruces. He has been a sales associate at Kohls for little over a year now and just received a 45-cent raise from minimum wage.
“I enjoy my work- I work just as hard as I was making 3 times, 4 times as much - its hard to live on minimum wage- minimum wage doesn’t buy – what it use to – its not worth- the same anymore” he says.
According to Café; Communities in Action and Faith Kurgans is one of 18,000 people in Las Cruces working for close to 7.50 hour, having difficulty making ends meet. The group is campaigning to increase the Las Cruces minimum wage to $10.10 an hour by 2017.
Vincent Vaccaro owns the Las Cruces Italian restaurant Lorenzo’s. He says most of his employees already earn more than minimum wage. He says he’s concerned some local businesses won’t be able to absorb the increase Cafe is proposing.
“I’ll probably cut my hours 15 hours a week, I will let at least four people go in staff and prices would definitely go up. Just to survive just to keep the restaurant going” he says.
Vaccaro says a large minimum wage increase would make some businesses less willing to hire young and lower skilled workers – making it harder for them to break into the workforce.
So Vaccaro and some other business people have proposed a minimum wage increase to 8.50 an hour over two years.
Many low income workers receive benefits from the government like food stamps. New Mexico State University Professor of Economics Chris Erickson says that means employers paying low wages are subsidized by the government and taxpayer money.
‘They adjust the wages they pay their workers accordingly- and so that becomes the subsidy not to the worker-but rather to the employer. So by raising the minimum wage- you make the employer pay the true costs of-that worker’. he says.
Erikson says even though businesses will see more money going out their doors in the form of higher wages- he says they are just as likely to see just as much coming in.
“ Low income workers tend to spend every dollar they receive and that can increase demand in the economy and in some studies has lead an increase in employment" he says,
Still Erikson says when minimum wages increase small businesses like Lorenzo’s are hit much harder. Smaller merchants risk losing customers to bigger businesses that have deeper pocket and can deal with wage increases without having to cut back hours or raise prices.
Vaccaro says local businesses have already been competing with as many as 16 chain stores that moved into Las Cruces last year. Though he doesn’t think Lorenzo’s is likely to go out of business- he is concerned others will.
“If mom and pops go out of business, we are going to have a homogenized city again with only chain restaurants, that the money go’s out of the city" he says
"There won’t be a flavor to Las Cruces anymore" he says.
$10.10 per hour is a fraction of what Kurgans was earning before he started working in Las Cruces. Though he is looking forward to some more money, for him it is as much more a question of dignity than it is one of financial security.
"I know that I am valuable where I am at. We are all valuable at what we do" he says
"To be told, what you are making now is enough, you’re not worth any more than that because it will affect our profit line, its not a great feeling" he says.
If a 10.10 minimum wage is approved in Las Cruces the city will have one of the highest pay levels for low income workers in the country.