Proposed minimum wage increase would have unintended consequences

Proposed minimum wage increase would have unintended consequences

The New Mexico State Legislature has sent to the governor a bill that would raise the minimum wage over coming years and progressively increase the tipped minimum for employees like waiters and bartenders to 25 percent of the full minimum wage.


The goals are to reduce income inequality, restore the “value” of work and provide support for lower-wage workers, many of them women, who are raising families on a single paycheck.


Those are worthy aims: I support them. And in an industrial society, like the United States of not-so-long-ago, raising the minimum wage would make sense.


But we live in a post-industrial America, and for restaurants – like the ones I run in Santa Fe and Albuquerque – this proposed legislation threatens a cascade of unintended consequences, many of them bad for the same people lawmakers set out to help.


Because we derive our value from physical labor, a typical restaurant employs roughly 10 times more humans per dollar of revenue than Google or Facebook or Amazon. Unlike Amazon, restaurants are experiencing a period of stagnant sales coupled with increasing costs.