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Another round of voter-approved minimum wage boosts to take effect

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What would you buy with an extra $6 a week?

Two gallons of milk? A Big Mac Meal?

An overpriced venti half-caf, sugar-free latte?

That’s how much more those at the bottom of the pay scale will be making come Jan. 1 when the minimum wage in Arizona rises 15 cents an hour to $12.15.

Before taxes.

Arizona voters mandated in 2006 that the state have its own minimum wage not tied to the federal figure. That set the bottom of the pay scale here at $6.75 an hour, $1.60 higher than what federal law mandated at the time.

Plus there were inflation adjustments.

A decade later, voters decided to turbocharge the raises, imposing a $10 minimum with automatic increases up to $12 as of 2020.

Meanwhile, the federal minimum wage remains at $7.25 an hour.

With the last of the pre-approved boosts now done, that puts Arizona back into the inflation-adjusted annual increases.

The state Industrial Commission figures that the Consumer Price Index, measured in August as required by law, is 1.3 percent higher than a year earlier. Add that to the current $12 figure, round to the nearest nickel and you come up with $12.15.

How many Arizonans that might affect remains unclear.

The Bureau of Labor Statistics has data about the number of workers who are earning at or below the federal minimum wage, the latter category including those who are in industries exempt from federal law. As of 2019, the agency figures that 1.9 percent of workers were at or below $7.25 an hour, or about 31,000 employees.

At $12 an hour the indications are the numbers get bigger. A lot bigger.

The same federal agency reports that, as of last year, the median wage for just home health and personal care aides in Arizona was just $12.02 an hour. That half of the nearly 67,000 workers in that category were making less than that.

Another more than 89,000 workers in retail sales had a median wage of $12.09 an hour. And among the 268,000 people in food preparation and serving, the median wage was $12.26.

Under Arizona law, employees who earn tips can be paid $3 an hour less — but only as long as the tips boost their wages to the minimum.

The same 2016 voter-approved law also requires nearly all employers to provide paid sick leave. Depending on the employer’s size, every worker can earn up to 24 or 40 hours of leave a year.

The whole concept of a state-set minimum wage continues to grate on the Arizona Chamber of Commerce and Industry, which waged unsuccessful efforts to kill both the 2006 and 2016 plans.

Chamber spokesman Garrick Taylor acknowledged this year’s increase of just 15 cents an hour is far less than when the floor went up by a dollar between 2019 and 2020. But he said even these inflationary year-over-year changes are problematic.

“What concerns us going forward, though, is we are now putting these automatic escalators to the test amid a wobbly economy due to an economic downturn brought on by the pandemic,” Taylor said.

He sidestepped a question of whether those at the bottom of the pay scale are entitled to have wages adjusted to account for higher costs, instead turning the question to overall employment.

“We are concerned with the downward pressure this puts on hiring because hiring becomes a more expensive proposition each year,” Taylor said.

He acknowledged the difference is $312 a year for affected employees. But it all adds up, with the difference between the federal minimum and what Arizona employers will now be required to pay now exceeding $10,000 a year.

History of Arizona and federal minimum wage

Year / State / Federal
2006 / $5.15 / $5.15
2007 / $6.75 / $5.85
2008 / $6.90 / $6.55
2009 / $7.25 / $7.25
2010 / $7.25 / $7.25
2011 / $7.35 / $7.25
2012 / $7.65 / $7.25
2013 / $7.80 / $7.25
2014 / $7.90 / $7.25

2015 / $8.05 / $7.25
2016 / $8.05 / $7.25

2017 / $10.00 / $7.25

2018 / $10.50 / $7.25

2019 / $11.00 / $7.25

2020 / $12.00 / $7.25

2021 / $12.15 / $7.25

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