By Jason Espinoza, President & CEO, New Mexico Association of Commerce and Industry
Creating jobs seems to be a universal rallying cry across the political spectrum, across socioeconomic strata and among not-for-profit, for-profit and public sectors. That cohesive idea quickly splinters when the question arises about how to create them, how to retain them and how to improve them.
When the New Mexico Association of Commerce and Industry talks about creating jobs, of course, much of its perspective comes from job-creating businesses - both large and small, in every part of New Mexico and spanning myriad industries. The feedback we consistently get from the expanse of our membership is that regulation is one of the greatest impediments to job creation in New Mexico.
Weighing down businesses like an anchor, regulations are preventing New Mexico businesses from taking risks, charting new paths and expanding their reach. And amid the economy's turbulent waves, businesses need the maneuverability to sail to deeper water to move with the waves, rather than take their brunt anchored in the harbor.
From workers to employers, we are all in this together, and if we will do more to slow down the colossal costs of over-regulating the workplace, we can stake a collective claim on successful job creation.
In May, the U.S. Department of Labor issued a new mandate regarding overtime. The final rule drastically increases the salary threshold under which most employees are automatically eligible for overtime pay - from $455 a week ($23,660 per year) to $913 a week ($47,476 per year).
Businesses in U.S. metros, including Albuquerque, Las Cruces and Santa Fe, have been subjected to the added overhead costs of municipally mandated minimum-wage increases, despite local market conditions and despite the fact that the increased pay does not yield increased productivity. These wage-increase campaigns have often been led by community-organizing groups, and with each passed mandate, these organizations are introducing more proposals in more cities that will only add to the burden of owning and running a business, which is not conducive to job creation or even to job retention.
Albuquerque has acted as New Mexico's test kitchen of these mandates, and the latest concoction might turn your stomach. A coalition of community-organizing groups have launched a ballot initiative to require all Albuquerque employers to "allow employees to accrue sick leave at the rate of one hour of leave per 30 hours worked," as well as "allow each employee to use up to 56 hours of accrued sick leave each year, and employers with fewer than 40 employees must allow each employee to use up to 40 hours of sick leave each year."
The coalition had until July 11 to collect at least 14,218 valid signatures from city registered voters to get this referendum on the ballot. Signatures are being verified now, and whether the question appears on the Albuquerque's general-election ballot remains unknown. But, if it passes in Albuquerque, expect it to be knocking on your door next.
New Mexico employers strive to provide their employees with the best benefits they can afford, while maintaining viable businesses and job opportunities. Allowing localities to mandate employer-provided benefits creates a regulatory patchwork, the compliance of which imposes significant costs on employers and discouraging them from growing and investing.
Furthermore, locally mandated benefits frustrate the Legislature's goal of a thriving statewide economy and places New Mexico employers at a competitive disadvantage to employers in other states not burdened with unnecessary local regulations.
ACI instead proposes "state preemption." What this means is that workplace laws concerning paid or unpaid leave, wages, fringe benefits, and scheduling should come not come from local governments, but rather and only from the New Mexico Legislature, in order to provide a stable environment for employers and to promote economic development. Since federal and state laws already provide workers with many safeguards and benefits related to their health, safety, civil rights, minimum wage, overtime pay, family and medical leave, disability, and other interests, employers should not be exposed to more compliance obligations by local governments that expose them to undue costs or penalties.
We should not look to government to create jobs, but rather to merely foster the environment for job creation by private-sector employers that have set their own course. But as more levels of government create more workplace regulations, they have the opposite effect and weigh down employers. It's time we collectively demand "anchors aweigh" for job creation.