Young people exempt from minimum wage under Republican bill

Insisting it will be good for young people, a House panel voted Monday to let employers pay students who are part-time workers just two-thirds as much as they do anyone else.

Rep. Travis Grantham, R-Gilbert, said he believes that if companies can pay some of their part-time workers less than the voter-mandated minimum, currently $11 an hour, they will hire more young people. He said the higher wage deters employers from bringing on people and training them.

“Ultimately, if this passes, I believe this will actually increase the number of jobs that are available and get more people in the workforce and help lower that youth unemployment rate,” Grantham said.

And Jon Riches of the Goldwater Institute, told members of the House Committee on Regulatory Affairs that getting someone a first job is important for character development and work ethics.

HB 2523 would say that employers could pay as little as the federal minimum wage, which is $7.25 an hour, to those who are full-time students younger than 22 who are working fewer than 20 hours a week.

Monday’s 4-3 party-line vote by the Republican-controlled committee came despite questions about whether lawmakers even have the power to carve out the exception.

Brenda Munoz Furnish of the William E. Morris Institute for Justice pointed out that Arizona voters created the first minimum wage in 2006. A second public vote in 2016, approved by a nearly 2-1 margin, will boost that to $12 an hour by 2020.

That, she said, means it is subject to the Voter Protection Act, a constitutional provision that bars lawmakers from tinkering with anything voters have approved.

“The Legislature cannot and should not undermine the will of the voters,” Munoz Furnish said.

But Riches argued that, technically speaking, nothing in the legislation affects what voters approved.

He said both ballot measures simply spelled out how much employers have to pay to their employees.

What it did not do, Riches said, is define who is an “employee.” And, that, he said, allows lawmakers to decide that some people do not fit that definition.

That’s precisely what HB 2523 does, creating a new definition in statute of employment “on a casual basis.”

Anyway, Riches said, the 2016 initiative was dubbed the Fair Wages and Healthy Families Act. That, he said, meant it was being sold to voters as a way of supporting full-time workers.

But Rep. Raquel Terận, D-Phoenix, who worked to get the 2016 initiative approved, said that ignores the fiscal realities of many families.

“I come from a district of the median income being $29,000,” she said. And what that means, Terận told colleagues, is that a student who is working a part-time job while going to school is contributing to the total income of that household, just as much as are the adults.

Rep. Amish Shah, D-Phoenix, also questioned why the measure was crafted to exempt part-time workers through age 21, given that the U.S. Constitution considers people to be adults at age 18.

More to the point, Shah said he was not buying the argument by supporters that lower wages for some is actually good for them.

“If the minimum wage were not there, it is possible that perhaps more people would be employed,” he said.

“However, as a society, we’ve also said that when those wages are set at a certain level it practically allows folks that do apply and get positions to then be able to support themselves and live lives that we feel are adequate for the circumstances,” Shah continued. “So that’s a societal decision that we’ve made.”

And Shah said even if it could be shown that the Legislature could redefine who is and is not eligible to be paid the minimum wage, this measure violates the intent of what voters approved.

But Rep. Walt Blackman, R-Snowflake, said he has no problem with the Legislature tinkering with the minimum wage law in this way.

“It’s government’s job to protect equal opportunity,” he said. “It’s not government’s job to provide equal things.”

Nor was he sympathetic to complaints by some students who testified that this creates a hardship.

“At times we have to do things that require extra work, like doing extra jobs or do two jobs,” Blackman said.

Rep. Pamela Powers Hannley, D-Tucson, said she sees it differently.

“Forcing Arizonans to live in poverty doesn’t do our communities or our state any good,” she said. And Powers Hannley said even if it only affects students, she sees no benefit in forcing them to take on more debt.

The legislation, which now needs approval of the full House, also is being supported by other business groups including the Arizona Chamber of Commerce and Industry and the National Federation of Independent Business. Both groups opposed the 2006 and 2016 initiatives to pay anyone more than the federal minimum wage, with the chamber even trying to block the voter-approved change through litigation.