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Arizona’s minimum wage to increase 30 cents at start of next year

A bartender at Plazma, a central Phoenix pub, Kevin Griffin makes Arizona’s minimum wage for tipped employees: $4.35 an hour. Beyond that, he’s at the mercy of customers.

But not all customers tip, he said.

“Not great,” he said. “I feel like I’m working for less than minimum wage helping people get what they want and they don’t appreciate.”

So he welcomed word that he’ll receive a 30-cent-per-hour bump in his pay come Jan. 1. That’s thanks to Arizonans voting in 2006 to establish a minimum wage that rises with the cost of living each year.

The Industrial Commission of Arizona announced earlier this month that the minimum wage will increase from $7.35 to $7.65 an hour. Tipped employees, who make $3 below the standard minimum wage, will also receive the raise.

For a full-time minimum wage worker, that’s $624 more next year.

“That’s one month of rent for me,” Griffin said.

Arizona’s minimum wage will be above the current federal rate of $7.25.

Sherry Gillespie, government relations manager of the Arizona Restaurant Association, said the mandatory increase affects hiring decisions and makes it harder for employers to give raises to deserving employees.

“Thirty cents an hour doesn’t seem like a lot, but when you’re talking about $30 cents an hour and it goes across the board and it’s every hour for every single employee that gets paid minimum wage, it adds up very quickly,” she said. “Many restaurants have lost millions because of that increase.”

But Rebekah Friend, executive director of Arizona State AFL-CIO, said research has shown that increases in the minimum wage even during recessions didn’t result in job losses.

The increase, she said, keeps working families out of poverty.

According to the U.S. Bureau of Labor Statistics, the year-to-year cost of living for all urban areas went up 3.8 percent from August 2010.

“As taxpayers you don’t want a system where someone is doing what they’re supposed to be doing, which is working to take care of their family, and yet they’re still having to supplement their income with taxpayer-funded services,” Friend said.

Tom Rex, associate director of the Center for Competitiveness and Prosperity Research at Arizona State University’s W.P. Carey School of Business, said the minimum wage protects employees’ standard of living.

“The reality is that if you don’t have minimum wage laws, wages will tend to hit the low end of the scale,” he said. “If we’re going to have a law, it should index inflation.”

He said employers overstate the minimum wage’s impact yet can easily pass on the difference to their customers.

“It’s just a few percentage points a year,” Rex said. “It just isn’t a big deal.”

But Byron Schlomach, chief economist at the Goldwater Institute, an independent watchdog group that promotes limited government and free enterprise, said the minimum wage makes employers reluctant to hire new workers and only makes it harder for Arizona’s economy to recover.

“This is a choice between earning $6 an hour and earning nothing,” Schlomach said.

For Griffin, the bartender, the increase is a way to keep up with the cost of living.

“It’s one month less I have to worry about getting my power shut off,” he said. “I’m always down for more money.”

Minimum wage:

• Proposition 202 passed in 2006 allowing Arizona to have a minimum wage that rises with the cost of living.
• The minimum wage remained unchanged in 2010 because of deflation.
• The current state minimum wage is $7.35 per hour and $4.35 per hour for tipped employees.
• The minimum wage will increase by 30 cents on Jan. 1, 2012.
• The current federal minimum wage is $7.25 per hour.

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