Arizona’s 43,000 minimum wage workers are not going to get a government-mandated pay boost in January.
And you can blame low oil prices for that.
New figures Wednesday from the Bureau of Labor Statistics show the consumer price index dropped a tenth of a percent from July. And that puts year-over-year inflation at just 0.2 percent.
That’s important because a 2006 voter-approved law requires the state Industrial Commission to adjust the minimum wage annually. And that agency uses the August year-over-year figures.
With the current minimum at $8.05 an hour, effective last January, that 0.2 percent increase comes out to less than two cents. And the commission rounds changes to the nearest nickel.
A formal vote is not set until next month. But absent some adjustment of the figures, the commission is likely powerless to boost the figure.
The most recent BLS data show 8,000 Arizonans working at the current $7.25 an hour federal minimum. Another 35,000 are paid less than that, although the agency says that includes those whose jobs are exempt and does not mean employers are violating federal law.
In its Thursday report, the BLS pegged year-over-year inflation for food at 1.6 percent. And for everything else except energy, there was a 1.8 percent increase.
But all that was pretty much wiped out with energy costs declining 15 percent.
Arizona businesses also are subject to federal minimum wage laws.
But changes to that require congressional action. And while President Obama and others have pushed such legislation – including even Republican presidential hopeful Rick Santorum at Thursday night’s debate – that figure remains at $7.25 an hour, where it’s been since 2009.
Among Arizonans making less than that current $8.05 figure are workers in some service industries.
Companies whose workers earn tips get a $3 “credit” toward the wages. That means it is legal to pay them just $5.05 an hour.
But the Industrial Commission requires proof that the employees are, in fact, bringing in at least $3 an hour in tips.
This would not be the first time the lack of inflation wiped out an increase in the state’s minimum wage. There was no boost in 2010 over the $7.25-an-hour state figure for 2009.
A boost in minimum wage does not just affect those at the bottom. It also can force businesses to increase the salaries of those who are just above that to keep a differential between new employees and those with experience.
There may, however, be relief for workers in some communities. But that’s up to their elected officials or voters.
In June, Attorney General Mark Brnovich effectively voided a 2013 state law, adopted at the behest of business interests, which precluded cities, towns and counties from adopting their own minimum wages higher than the state figure. Brnovich said the 2006 measure specifically allows local communities to adopt a higher figure. And he said because that law was approved by voters, the Arizona Constitution makes any contrary legislative action unenforceable.
There is an active effort underway in Flagstaff to adopt a “living wage” law in that community.
Business interests, especially the restaurant and hospitality industry, worked to defeat the 2006 law and have regularly talked about seeking its repeal. But they have never actually moved to put the issue back to voters.