Santa Fe Approves Historic Minimum Wage Increase Tied to Housing

The city of Santa Fe has taken a significant step in labor policy by approving a historic minimum wage increase. Starting on January 1, 2026, the minimum wage will rise to $17.50 per hour. This decision, spearheaded by Mayor Michael Garcia and supported by the Santa Fe City Council, marks a notable shift in how minimum wage is calculated, incorporating both the Consumer Price Index (CPI) and housing costs.

The city council’s recent vote reflects a growing recognition of the financial challenges faced by workers. Under the new ordinance, the minimum wage is set to increase from the current $15 per hour to $17.50 by 2027. This increase is designed to ensure that wages keep pace with both inflation and the rising costs of living, particularly housing.

Innovative Wage Calculation Method

This adjustment is groundbreaking as it is the first time a city has used a dual approach to determine minimum wage. According to Reilly S. White, the associate dean of teaching and learning and associate professor at the University of New Mexico, Santa Fe’s new methodology considers not only the CPI but also local housing prices. This dual focus aims to align wages more closely with the actual living conditions of residents.

The proposal to amend the terminology from “minimum wage” to “living wage” was also discussed, although it was ultimately not adopted. Mayor Garcia argued that the term “minimum wage” does not accurately reflect the financial realities many workers face. He expressed satisfaction with the new measure, stating it is “a step in the right direction” for labor rights in the city.

Addressing Cost of Living Challenges

Historically, Santa Fe, like many cities, has relied solely on the CPI to set its minimum wage. Until now, calculations were based on a 12-month increase of 2.76% in the CPI for the Western Region, which resulted in a minimum wage of $14.60 per hour for 2024. The council’s recent amendment aims to adjust the minimum wage to better reflect the economic landscape, ensuring that wages are not just nominally increasing but are truly livable.

The decision comes amid rising concerns over the cost of living in Santa Fe, which has outpaced the established minimum wage. By considering housing costs along with the CPI, the city aims to provide better support for its workforce, particularly those in lower-income brackets.

Santa Fe’s approach could serve as a model for other municipalities grappling with similar economic challenges. By prioritizing the well-being of its workers and taking proactive measures to adjust wages, the city is setting a precedent for future labor policies. As the implementation date of January 1, 2026 approaches, residents will be watching closely to see the impact of this historic decision on their lives and the local economy.