Minimum wage may get chance in Arizona

Posted on June 18, 2006 | Type: In the News
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A proposed state law establishing a $6.75 minimum wage likely will go to voters in November, making Arizona one of several states with similar ballot issues this year.

Arizona does not have a minimum wage law, but most employers are required to abide by federal minimum wage law. The federal minimum wage, now at $5.15 an hour, hasn't been increased since 1997. Adjusted for inflation, that is about $6.25 in today's dollar.

Since Congress has declined to raise the federal minimum wage, a broad effort to take on the issue at the state level has spread across the nation.

Wisconsin raised its minimum wage by 14 percent on June 1, and 12 more states will increase the minimum hourly rate by the end of the year. Massachusetts is poised to enact the highest minimum wage in the nation, $8.25 an hour.

Besides Arizona, up to five other states could put proposals on their November ballots.

An initiative spearheaded by the Arizona AFL-CIO would establish a state minimum wage of $6.75 an hour - a 30 percent raise for those earning the federal minimum. The wage would then be adjusted for inflation annually.

State legislators have introduced minimum-wage bills for several years in a row, but the bills have gone nowhere. Opponents of a state minimum wage argue it will cost entry-level jobs.

"We decided to take this to the people," said Rebekah Friend, president of the Arizona AFL-CIO and chairwoman of the Arizona Minimum Wage Coalition. The group chose the $6.75 number based on polls that showed it was a popularly acceptable wage, she said.

"You can't live adequately on $5.15 an hour," Friend said. "You deserve to make a decent wage."

Thousands of Arizonans have signed petitions that could send the minimum wage law initiative to the November ballot.

The last day to sign a petition is Thursday. The coalition needs 122,000-plus signatures by July 5 to get the initiative on the ballot. It has collected more signatures than it needs and has turned its efforts to voter turnout, said Kristi Taylor, political field director for Arizona ACORN, one of the members of the coalition.

Higher wage an incentive

Sylvia Salomon, who signed a petition in South Tucson on Friday, said she'd like to see a higher minimum wage because better pay is an incentive for unemployed people, like her teenager, to look for work.

Few people actually earn the minimum wage in Arizona, but the state has no way to count them. The average Arizonan earns $16.80 an hour, according to the Arizona Department of Economic Security's Research Administration.

Friend, of the AFL-CIO, estimates 145,000 Arizonans, or roughly 5 percent of the workforce, would get a raise if the initiative passes. About 74 percent of people earning minimum wage are at least 20 years old, she said, so it's not all teens with after-school jobs.

Nationwide, around 3 percent of the hourly work force, or about 2 million workers, earn $5.15 or less, according to the Bureau of Labor Statistics.

Popular opinion seems to support the initiative. In March, a Grand Canyon State Poll conducted by the Social Research Laboratory at Northern Arizona University showed 81 percent of survey respondents said they were supporters.

That appears to reflect national sentiment. An April survey from the Pew Research Center for the People & the Press found that 83 percent of the American public favors raising the federal minimum wage to $7.15.

While the idea is more popular among Democrats - 91 percent support a $2 boost - 72 percent of Republicans backed it, the survey reported.

The case against raising the minimum wage is that higher salaries will hurt small businesses and ultimately eliminate jobs by raising costs.

"Here's the trade-off: higher wages but fewer jobs," said Darcy Olsen, president of the Goldwater Institute, a nonprofit policy research group. "For most people, some employment is better than no employment at all."

She said she understands the intent of the initiative is to help people earn more, but when a government imposes a minimum earning level to work, some people willing to work at any wage are pushed out. Teens and others entering the workforce for the first time rely on low-paying jobs to gain experience, Olsen said.

"First rung on the ladder"

"Working at minimum wage is not a permanent state of being - it's simply the first rung on the ladder," Olsen said. "The last thing you want to do is take that rung off and make that first step too high for people."

The Arizona Restaurant and Hospitality Association opposes the initiative, saying tipped workers already are making well above the minimum wage and entry-level workers are worth minimum wage until they develop skills.

"We look at it more as a training wage, because it's entry-level and they don't stay at that wage long," said association President and CEO Steve Chucri.

The prevailing wage for some of the lowest-paid positions in Tucson already is higher than the federal minimum wage. The average wage among waiters in Tucson is $6.30, the average for dishwashers is $6.70, and the average among hosts is $6.80, according to the Department of Economic Security.

Adding to the cost of doing business by making labor more expensive hurts employers, Chucri said. Business owners with already thin profit margins possibly would have to lay off some workers, consolidate some jobs and increase prices, he said.

Prices rise with wages

A study released Thursday by the Employment Policies Institute reaffirms that minimum wage hikes lead to increased prices and higher unemployment. Economists said a 10 percent increase in the minimum wage leads to a 1.6 percent rise in fast-food prices and job losses of 2 to 2.5 percent.

Fears of lost jobs haven't been realized yet in Wisconsin. A recent report from the Wisconsin Department of Workforce Development said last year's increase in the state's hourly rate - to $5.70 from $5.15 - produced $175 million in additional payroll and a $3 million boost in state tax revenue.

A spokeswoman said the state did not suffer job losses from the higher standard. State officials say this month's wage boost in Wisconsin will help 50,000 to 60,000 workers.

In any case, economic opposition seems to have lost the battle for public opinion. Voters in Florida - a state President Bush carried with 52 percent of the vote in 2004 - overwhelming approved a minimum wage increase, indexed to annual cost-of-living changes, in 2004.

The measure passed with 71 percent support, a margin that convinced advocates that voters would embrace an increase, regardless of politics.

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