Minimum wage possibly on the rise

Prop 202 to be decided by voters

In 1997, scientists in Roslin, Scotland announced that they had successfully cloned a sheep, Tony Blair was elected British prime minister and people worldwide mourned the death of Diana, Princess of Wales.

That was also the year the federal government increased the minimum wage to $5.15 per hour -- and it has not been raised since.

Backers of Proposition 202 argue that it is time for Arizona workers to make at least $6.75 per hour.

"$6.75 is a step in the right direction towards a livable wage," said Renee Broberg with the Arizona United Food and Commercial Workers Union. "This wage increase would help 37,000 Arizonans [get] out of poverty."

If approved, the initiative would establish a minimum wage of $6.75 for the state, which would be adjusted each January to keep up with cost-of-living. Arizona is one of six states in the United States that does not have a state minimum wage law, according to the U.S. Department of Labor.

The wage increase would start in 2007. If the wage rose 2 percent each year to compensate for cost-of-living, the wage would be $6.90 in 2008 and $7.20 in 2010.

The law would exempt those employed by a parent or sibling, any business that has less than $500,000 in gross annual revenue, the State of Arizona government, babysitters and tipped employees.

However, Senior Consultant Michelle Davidson with political affairs consulting firm The Media Guys said a tipped employee's wage would increase from the current $2.13 per hour to $3.75 per hour if the proposition passes.

According to the Arizona League of Women Voters, since the minimum wage was last increased in 1997, "the buying power of the federal minimum wage of $5.15 has decreased significantly, putting a minimum-wage worker below the poverty line."

However, some organizations remain opposed to the wage hike claiming it would force job cuts, cut workers' benefits and cause businesses to pass on the extra expense to customers.

According to the Arizona Chamber of Commerce and Industry, "Proposition 202's creation of a much higher minimum wage seems like an attractive idea, but there will be a cost that regrettably will be borne by the very workers it's promised to benefitŠ Proposition 202 is reckless not only because it establishes an uncompetitive minimum wage rate, but because it threatens to undermine worker benefits, especially health care coverage. With its passage, small businesses will be forced to cut costs by scaling back or, more likely, eliminating expensive employer benefits."

Additionally, the state chamber of commerce claims the proposition will effect unskilled workers beginning their careers because employers will not want to pay them $6.75 for an entry-level position.

"The opposition is stating that it will hurt businesses and cause unemployment," Broberg said. "This is not trueŠwe have done research which states it will not cause unemployment because of most businesses' profit margins."

Cottonwood Chamber of Commerce President Margie Beach said "Raises in the minimum wage have caused little hardship in the past, and I doubt that this raise would create more than a very minimal, short-lived difficulty for a few places of business."

She added that "most" businesses in the Verde Valley pay at least $6.50 per hour now, and therefore believes the hike would have little long-term effects.

Critics of the proposition, including the Arizona Restaurant and Hospitality Association, claim it would create higher dinner tabs.

Although Camp Verde Chamber of Commerce Executive Director Roy Gugliotta said the move would be "excellent" in most industries, he did acknowledge the service industry's claim.

He referenced small restaurant business owners in California who, after the state's minimum wage increased, were forced to pass the cost on to their customers.

Despite critiques, a KAET-TV (a Phoenix PBS affiliate) poll revealed that 77 percent of people polled were in favor of the raise.

According to the Arizona Minimum Wage Coalition, average wages other than the minimum wage in all Arizona counties have risen over the last nine years.

The coalition also states that, despite what some think -- that only high school kids are making minimum wage -- more than 70 percent of minimum wage earners are 20 years old or older.

All registered voters in Arizona will be asked to vote on Proposition 202, the Raise the Minimum Wage for Working Arizonans Act, Nov. 7.

A look at the numbersŠ

States with no minimum wage law - 6 (including Arizona)

States with higher minimum wage than the federal law - 17

States with minimum wage rates equal to the federal - 26

States with minimum wage rates lower than the federal - 1

*Source: U.S. Department of Labor (mainland states)

Across the globeŠ

United States minimum wage - $5.15

United Kingdom - Euro 5.35, (About $6.69) (for those 22 years of age or older)

Euro 4.45 (18-21)

Euro 3.30 (16-17)

Australia - $12.30

*Sources: United Kingdom Low Pay Commission and the Australian Council of Trade unions


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