To the 21-year-old Mesa resident, who is working two low-paying retail jobs to put herself through computer networking school, the debate over raising Arizona’s minimum wage is anything but academic.
Celaya is one of about 145,000 legal Arizona residents who would receive an instant raise with the passage of Proposition 202, a proposed increase in the state’s minimum hourly wage from the current $5.15 to $6.75 for workers who do not receive tips, and from $2.13 to $3.75 for tipped workers.
Opponents of the increase, led by representatives of the hotel and restaurant industry, say it would raise the price of goods and services, threaten jobs and put small businesses at risk of financial ruin.
Also at issue is a provision that would allow employees or their representatives to review their personnel records if they believed they were being underpaid. Opponents say the language is vague, contradictory and could be exploited to obtain sensitive information about employees without their permission.
But supporters of the increase say both history and common sense contradict such arguments against the wage hike.
Celaya said she just wants to be able to pay her tuition and monthly bills so she can achieve financial independence and have a successful career.
“I have two jobs, and I can barely get by,” she said. “Sometimes I have to wait for the next paycheck just to buy gas.”
Celaya’s situation is not unusual in a state where the minimum wage hasn’t changed for nearly a decade, said Alicia Russell, treasurer of the Arizona Minimum Wage Campaign, which supports Prop. 202.
Russell said 74 percent of Arizona workers making less than $7 an hour are adults, and more than 58 percent of the state’s minimum wage earners are women. A third of them are the primary wage earners in their households, she said.
“They just need to have the same things everyone else has, and they’re working just as hard,” Russell said.
Still, those opposed to the increase say they aren’t convinced Prop. 202 would provide a significant benefit to Arizona workers, most of whom already make more than the existing minimum.
Steve Chucri, president and CEO of the Arizona Restaurant & Hospitality Association, said he is convinced, however, that the measure would harm restaurants by forcing them to pay food servers and other tipped employees a higher wage regardless of how much they earn in tips.
“The restaurant industry is a fragile economy,” he said. “It operates on razor-thin profits.”
Another big concern about Prop. 202 is that it requires annual minimum wage increases that would be tied to changes in the consumer price index, an economic indicator that tracks the cost of consumer goods and services, Chucri said.
The price index could increase even while individual businesses are struggling, he said, and Prop. 202 would not allow the minimum wage to be lowered if the index goes down.
“The (price index) is what kills us,” he said.
Opponents also have warned that a significant increase in wages would lead to inflated prices for consumer goods and services. However, historical data from neighboring California doesn’t support that argument.
At the Tribune’s request, economist Todd Johnson with the California’s Economic Analysis and Information office compared years in which the state’s minimum wage increased with changes in the consumer price index in the year that followed.
More often than not, the price index – a relative indicator of the cost of goods and services – actually decreased in the year following a minimum wage increase.
Johnson said that doesn’t mean increasing the minimum wage lowers prices, but he said it’s likely that such increases did not affect the economy enough to cause any changes.
“I would tend to say it’s really irrelevant,” he said.
Robert Pollin, a professor at the University of Massachusetts, conducted a study paid for by groups supporting Prop. 202 in which he estimated the state’s total increase in salaries would be $356 million a year.
Pollin concluded that since total annual sales revenue among all Arizona companies is about $370 billion, the effect on prices would be less than one-tenth of one percent.
However, Chukri said opponents of Prop. 202 question Pollin’s methodology and are not convinced by his results.
“For every statistic that you see, I’m sure you can find one that counters that,” he said.
In addition, Chukri said the study’s suggestion that businesses could simply raise prices by a few pennies isn’t realistic.
Overall, he said, employers should be allowed to set wages based on market forces and the quality of work performed.
But some workers earning just above minimum wage say they need a hand from voters because the free market has failed them.
Leann Kinsey said the $6 an hour she earns at her customer service job is not enough to support the Phoenix resident and her 14-year-old son, who recently got his own job at a grocery store to help pay the bills.
Kinsey, 36, said she doesn’t have enough money left at the end of the month to buy school supplies, much less give her son an allowance or take him to the movies.
Proposition 202 would
•Increase the state’s hourly minimum wage from $5.15 to $6.75 for workers who don’t receive tips
•Increase the minimum hourly wage from $2.13 to $3.75 for workers who do receive tips
•Require annual increases in the minimum wage based on changes in the consumer price index
•Task the Industrial Commission of Arizona with investigating claims of minimum wage violations.
Email this page
