By Howard Fischer
Mail | X: @azcapmedia

PHOENIX — Arizona is going to require workers to be paid at least $15.15 an hour starting next year.

New figures Thursday from the Bureau of Labor Statistics show that year-over-year inflation through August hit 2.9%.

What makes that significant is that laws approved here by voters in 2006 and again in 2016 require the state’s minimum wage to be adjusted annually to match the change in the Consumer Price Index that is reported each September. That means the current floor of $14.70 will go up by 45 cents on Jan. 1, a figure by law that is rounded to the nearest nickel.

People working in Tucson and Flagstaff will see an even higher minimum.
In Tucson the minimum already is $15 an hour. It, too, will increase by 45 cents, to $15.45.

And in Flagstaff the $17.85 minimum will hit $18.35 in January.
Meanwhile, the federal minimum wage remains at $7.25 an hour, a figure last adjusted in 2009. That remains the law in 20 states.

A lot of Arizonans will be affected by the latest boost.

The state Office of Economic Opportunity estimates there are about 230,000 individuals in Arizona who earn no more than $15 an hour based on the most recent data. That doesn’t count those already earning more than the old minimum who now may also get a pay bump to keep them above the new minimum.

But a proponent of what has been a fight going on for nearly two decades says that’s hardly a victory given how much costs have gone up since that $15 aspirational goal was announced.

Alejandra Gomez, executive director of Living United for Change in Arizona, said her group now is looking at whether to go back to voters one more time and get a bigger bump — this time to $20 an hour.

“Most Arizonans are suffering from the rising cost of housing,” said Gomez whose organization was behind the successful 2016 initiative. That took the then-current figure of $8.05 an hour to $12 by 2020, with inflationary adjustments ever since.

“They are suffering from the rising cost of utilities,” she said.

The situation is different at the other end of the income spectrum, Gomez said, where wages of corporate executives are multiple times that of those of their employees.

Gov. Katie Hobbs said she could not say what would be an appropriate figure.

“I know that Arizonans are struggling,” she told Capitol Media Services, saying it is her job to “address that struggle.”

But the governor said it is legitimate to have a public discussion of how much people need to be paid.

“I think a living wage is where somebody can afford to keep a safe roof over their heads, that has functioning utilities and water and they can put food on the table to feed their families,” she said. “That is different for everyone.”

And what about supporting an initiative for a big increase in the minimum.

“I cannot speak to language and a ballot measure I have not seen,” she said.
A ballot measure, if it proceeds, would pave the way for yet another high-profile battle with the business community which fought — and failed to defeat — both the 2006 and 2016 initiatives. And leading that opposition has been the Arizona Restaurant Association.

Steve Chucri, president of that group, is preparing his arguments. One of them comes down to a simple question: Where does it end?

First, he said, was the fight to get wages up to $15 an hour.

“So we’re there,” Chucri said. “We’ve always stated in the past that it’s always going to be ‘Fight for $15,’ then ‘Fight for $20,’ then ‘Fight for $25.’”

He believes the public has had enough.

Consider, he said, the decision by California voters last year to reject Proposition 32, which would have raised the minimum wage there to $18.
Chucri also said an effort in Arizona to add an extra dollar to the state minimum wage — above and beyond the scheduled annual inflationary increases — failed here last year. That same measure also would have scrapped existing law that allows businesses to pay their tipped workers $3 an hour less as long as their tips reach the minimum.

In fact, though, it wasn’t because Arizona voters rejected the measure. The failure was the ability of proponents to get sufficient signatures to put the issue on the 2024 ballot.

Conversely, a measure proffered by Churci’s organization to alter how the tip credit is calculated — and in a way that would have saved money for restaurant owners — did make the ballot. And voters rejected what the restaurants wanted by a 3-1 margin.

Gomez, for her part, said history actually is on her side.

Prior to the 2006 ballot measure, Arizona had no minimum wage of its own. Instead, employers were required to comply only with federal law and its $5.15-an-hour floor.

That measure, which provided for an immediate $1.65-an-hour boost and future increases linked to inflation, was approved by a margin of close to 2-1 despite objections from the Restaurant Association and other business groups.

The 2016 measure — the one that went to voters when the minimum hit $8.05 — also was approved handily by more than 58% of voters. Here, too, the restaurants and businesses financed the opposition.

It is that law which now is in effect, with the mandated annual inflation indexing bringing current wages to $14.70 — and $15.15 beginning next year.
Chucri said if and when a new ballot measure emerges, it will be his job to convince voters there will be negative effects felt by consumers and workers.

It starts, he said, with the price tag. Chucri said the industry has reached the point where the cost of labor is greater than the cost of the food being prepared. To deal with that, he said restaurants are buying equipment to do what used to be done by staffers.

Chucri specifically cited a move by Chipotle that has been using Autocado, a machine that can cut, core and peel avocados before they can be mashed into guacamole, the last part of that process the chain says is done by hand.

“Some of these elementary level, these entry-level spots in the restaurant industry that some of the workers depend on, you’re going to see replaced by technology,” he said. “They’re looking to automate more and more, given the cost of labor.”

Regardless of what the future holds, whether at the ballot box or due to inflation, that still leaves the new annual inflation figure of 2.9%.

But all prices are not up by the same margin. BLS reports grocery prices were up 2.7% while the cost of eating out rose 3.9%.

Electricity prices are up 6.2% over the same time last year. But the agency figures that gasoline costs actually are 6.6% lower.

Prices on new cars rose just 0.7%, versus a 6.0% increase in purchasing used wheels.

And the cost of shelter — rent and equivalent costs for homeowners — is up 3.6%.