One city’s experiment connects housing costs to pay in an effort to keep workers from being priced out.
00:00 – The Catchphrase that Spread Nationwide
00:28 – Rent Doubles, Wages Don’t
00:45 – Why Santa Fe Took a Different Approach
01:15 – Mayor Alan Weber’s Rent-Linked Wage Law
01:39 – The Origin of Santa Fe’s Wage Reform
02:03 – Why $17.50 Isn’t a Living Wage
02:26 – Building a Full Affordability Toolkit
02:51 – Balancing Workers’ Needs and Small Businesses
03:21 – Why Treating Workers Well Helps Business
04:00 – How Santa Fe Built Consensus
04:27 – Santa Fe’s Vision of Victory
Transcript:
CAROLINE WOODS: That’s Jimmy McMillan. In 2010 he ran for governor of New York under the ‘Rent is too damn high’ party. He didn’t win, but he did create a catchphrase that’s been echoed across the country in the years since.
When McMillan ran in 2010, the national US minimum wage was $7.25 an hour and average monthly rent in the US was $895 a month.
Fifteen years later that average rent has nearly doubled to around $1650 a month, and the minimum wage is unchanged at $7.25 an hour. While cities and states are allowed to set their own higher minimum wage, 20 states still maintain that $7.25/hour minimum.
One state that doesn’t is New Mexico – the state has a minimum wage of $12 an hour, but its capital city Santa Fe recently took an interesting approach to setting its own minimum wage.
We have a formula that will govern the increase in our living wage every year, and it’ll be a blend. 50% will be consumer price index or inflation broadly defined, and the other 50% will be HUD data on the cost of renting an apartment in Santa Fe.
That’s Alan Webber. He’s the mayor of Santa Fe, and recently enacted a law tying minimum wage to rent.
We think that’s a much more creative way to address the fundamental issue, which is how do people who work in Santa Fe find the means to be able to live in Santa Fe. People want to live here. People for generations have made Santa Fe their home, and we don’t want to lose those families. We don’t want them to have to move out.
Mayor Webber, who will leave office this December after two terms, has been working on the bill for years.
It started several years ago when our food Depot did a study at my request. I asked the food Depot here in town, what do we have to do in Santa Fe to make sure no child goes to bed hungry at night. And I, I firmly expected them to come back with advice on how to take farm to table food and get it into families, how to work with restaurants and supermarkets to get to lower income Santa Fe. And they came back and said, the best thing you can do to make sure your kids in our community don’t go hungry is raise the living wage. We started on that journey several years ago.
The law raises the current minimum wage of $15 an hour to $17.50 an hour starting in 2027,
1750 is clearly not a living wage. If you look at the MIT calculator that they have online that helps calculate a living wage, 1750 is not going to get the job done. On the other hand, it is a step in the right direction. It’s a compromise designed to both help something like 9,000 people in Santa Fe.
While he says the wage alone is not high enough, Mayor Webber considers it just one tool in addressing the cost of living.
it’s part of a bigger package or a toolkit to address the affordability crisis. That’s a national issue. I think 1750 is sustainable. It threads the needle between helping people significantly and not harming the businesses that we need to have flourish in Santa Fe. || It could actually be a benefit for our small business community to know that change is always going to come, and to know that the city has resources to help people adapt to that change.
The city worked with both worker rights groups and the local chamber of commerce to settle on $17.50 an hour.
It’s a compromise. We don’t want to punish or harm our small mom and pop businesses that are the backbone of our local economy. Our city’s Office of economic development will spend the next year offering free consulting services to any small business that needs help so that they’re not adversely affected
The mayor, a former businessman who also co-founded the magazine Fast Company, believes this will help both workers and businesses.
the better you treat your people, the more loyalty you have, the more productivity you have. Really, you get the benefit of a devoted workforce that believes leaves in the enterprise they’re working for, and I think this measure will cement that relationship. It will encourage more collaboration between a business owner and that owner’s team of workers.
As for any advice he may have for other cities or mayors looking to address affordability.
A mandate for a city we can afford!
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