Arizona’s minimum wage has risen by another 50 cents due to the passage of Proposition 206, which Arizona voters passed in 2016.
The proposition, also known as the Minimum Wage and Paid Time Off Initiative, raises the minimum wage incrementally every year until 2020, when it will reach $12 per hour.
Arizona’s minimum wage is now $3.75 higher than the federal minimum wage of $7.25. Currently, 29 states and Washington, D.C., have a minimum wage higher than the federal one, according to the Economic Policy Institute.
Arizona is one of 18 states that began 2019 with a higher minimum wage than the previous year, according to the National Conference of State Legislatures. Other states include California, Colorado and New York.
While some business owners expressed concerns about the harm the proposition could have on the local economy, proponents of the initiative say it is a much needed increase to what had been longstanding stagnant wages in the state.
Lee McPheters, who is a research professor of economics in the W.P. Carey School of Business, said that states and cities have taken matters into their own hands and set their own minimum wage because the federal rate has not changed since July 2009.
“In general, it’s an effort to try to obviously increase working conditions and environments for people at that minimum wage level," McPheters said. "Everyone else’s wages have gone up, but the minimum wage has not.”
However, like last year's increase, on-campus workers will not see the benefits of these increases. As state agencies, ASU and other Arizona universities do not have to implement the new law right away. Despite this, ASU's wage scale for student employees, which covers all student positions except for research and teaching assistant positions, begins at $10 per hour.
Read more: ASU on-campus workers exempt from Proposition 206
Some cities, like Flagstaff, Ariz., have voted to increase their minimum wage even higher than the state’s level to accommodate the higher cost of living in the area. Because of Proposition 414, which was passed during the 2016 election, Flagstaff’s minimum wage will increase to $15 per hour by 2021.
McPheters said that because of the increases to the minimum wage, workers who received it have experienced higher increases in income than non-minimum wage workers have during the last two years. Specifically, McPheters said that the wages of restaurant workers "are up over 15 percent” since 2015.
“That is a pretty sizable increase," McPheters said. "When you look at all Arizona wages, they’re up only about 5 percent over that same period.”
Alec Smith, a freshman studying electrical engineering, said he works for minimum wage as a sales associate at Office Max in the print services department. He said he started his job to earn some pocket change.
“I just wanted to get a bit of money, so I could have a little bit of savings when I go to college,” Smith said.
An increase in minimum wage is deserved for some workers, but not for all, he said, as young workers getting their first jobs do not need to make that much money.
“I’m glad for me because my job is skilled labor,” Smith said. “But for those who don’t do much at their job, it’s just manual labor."
"It's already high for me, so being 12 dollars an hour for a 16-year-old getting their first job … it shouldn’t be," he said.
Cindy Dach, one of three owners of Changing Hands Bookstore, a locally-owned bookstore with locations in Tempe and Phoenix, said she believes an increase in minimum wage is important.
“I think minimum wage is a challenge for many businesses, and it depends on the business,” Dach said. “However, I think minimum wage is very important for the worker.”
Official arguments against Prop. 206 prior to the election included concerns of prices going up along with minimum wage, but Dach said it depends on the type of product being sold.
For bookstores, prices are printed on the cover and cannot be changed as employees earn higher wages, she said. But for businesses like restaurants, who can control their prices, she said it may be more likely they would raise prices.
Dach also said an increase in minimum wage does not necessarily mean that more money is being spent in the community.
“The theory behind raising minimum wage is that people will spend more, so ultimately the business will do better,” Dach said. “But the challenge in 2019 is online retailers who 'deep discount,' because if everybody who gets an increase in minimum wage chooses to spend their dollars on a discount retailers online, bricks-and-mortars will 100 percent go out of business.”
While he said businesses might have to make budget adjustments, McPheters said that the outlook for Arizona's economic health since the first increase in minimum wage has been promising.
“From an economic perspective, that has the effect of increasing personal income, increasing spending and so forth," he said. "So from that side of things, it is probably good for the economy.”
Reach the reporter at mzhao49@asu.edu and follow @michelle_zhao23 on Twitter.
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