A ballot initiative to establish a state minimum wage will create havoc for private employers and could set the stage for an increase in identity theft, said two Arizona congressmen and a business community official at an Oct. 16 press conference on the Senate lawn.
“Whether it was intended to help or not, it would create a grave danger for Arizona’s economy and Arizona businesses across the board,” said Republican Congressman John Shadegg, an elections law attorney.
The opponents of Prop. 202, which would establish a minimum wage of $6.75 an hour and provide for annual adjustments based on the consumer price index, urged rejection of the measure because it allows individuals and organizations to file complaints against businesses on behalf of workers — even without their consent.
This could expose business records containing Social Security numbers and other personal information to those who file complaints and to organized crime syndicates and individuals attacking government Web sites, said critics of Prop 202.
The initiative also drew Mr. Shadegg’s condemnation because it would require the rewarding of attorneys’ fees to “prevailing plaintiffs” in wage disputes, but not to prevailing defendants, an issue he said is “unbalanced and unfair.”
Republican Congressman Jeff Flake criticized the initiative as a departure from capitalism because it mandates a government wage minimum and encourages businesses to file complaints against each other to learn secrets, raise the expenses of competitors, and occupy their time.
An official with the Greater Phoenix Chamber of Commerce said law-abiding employers accused of underpaying workers would have great difficulties defending themselves because of the initiative’s high burden of proof requirement.
“This uses the clear and convincing standard, which is right below the criminal standard of beyond a reasonable doubt,” said Todd Sanders, vice president of public affairs. “And not only do you have to reach a higher standard, but you’re automatically guilty unless you can prove yourself innocent.”
Civil sanctions collected during enforcement of the initiative would not be remitted to the state’s general fund, but kept by the agency that collected it, creating an incentive for abuse, said Mr. Sanders.
Under the provisions of the initiative, the Industrial Commission of Arizona or any other agency designated by the governor would be responsible for enforcing the wage increase.
AFL-CIO: ‘We want to give Arizonans a raise’
Dana Kennedy, a spokeswoman with the Arizona AFL-CIO, declined to comment on the initiative’s legal language, but said claims of the opponents are bogus and a “diversionary tactic,” to place unwarranted negative attention on the measure.
“We want to give Arizonans a raise,” said Ms. Kennedy. “Congress has failed to do that, the state Legislature has failed to do that, so we’re bringing the issue to the people.”
Over the summer, Mr. Shadegg and Mr. Flake split votes on a House bill to incrementally raise the federal minimum wage from $5.15 an hour to $7.25 by 2009, with Mr. Shadegg voting yes and Mr. Flake disapproving of the measure.
The bill, which died in the Senate, also increased the amount of estates exempt from taxes to $5 million for an individual and $10 million for a couple.
USA Today reported the wage hike bill also contained extensions of tax breaks for college tuition, business research and development, and reinstates incentives for businesses to hire welfare recipients.
Democratic Senate Minority Leader Harry Reid, D-Nev., said the additional conditions of the bill amounted to “blackmail,” according to the newspaper.
The Oct. 16 press conference came less than a week after several Democratic state legislators, Senate candidate Jim Pederson, and Governor Napolitano held a rally on the Senate lawn to promote the initiative.
Ms. Napolitano, who spoke at the rally and answered questions later during her weekly press conference, said she has not decided which agency she would grant the enforcement task to.
Arizona joins Missouri, Montana, Nevada, Ohio and Colorado among states with minimum wage initiatives on the November general ballot, according to the Ballot Initiative Strategy Center.
In 2004, California, Florida, Oregon and Washington all raised their minimum wage standards above the federal minimum level of $5.15 an hour through ballot initiatives, according to the group.
Arizona is one of six states in the nation to rely on the federal wage level. Twenty states have surpassed the federal minimum standard through the use of legislation.
Reporter Phil Riske contributed to this article.