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Raised wage, raised questions: How Prop. 206 could affect working Arizonans

Now that an increased minimum wage has been approved, the state labor force and economy could see significant changes

Photo illustration done on Wednesday, March 3, 2016.

Photo illustration done on Wednesday, March 3, 2016.

Election season in Arizona brought about many changes, including the ousting of a sheriff, the rejection of recreational marijuana use and the start of new city maintenance projects, which voters approved for their cities.

Come Jan. 1, another big change that working Arizonans will experience is an increase in minimum wage created by voter approval of Prop. 206, the minimum wage and paid time off initiative. At the start of 2017, minimum wage in Arizona will be increased to $10, and incrementally to $12 by 2020.

The initiative’s “yes” percentage was 17 percent higher than its “no” percentage, according to Ballotpedia.

Suzanne Wilson, a communications director for AZ Healthy Working Families, said her organization campaigned heavily for the initiative because working Arizonans have been pushing for a raise throughout recent years.

“I think it’s just something Arizonans have wanted for a long time,” she said. “This started off as an initiative that was brought together from the people ... We needed something that was going to help working families have a substantial living — something that they can live off of.”

Wilson said the initiative, which calls for paid sick leave, will greatly help students who are living under the pressure of both academics and their part-time jobs simultaneously.

“There are so many students right now who are working and trying to get through college at the same time,” she said. “You think about some of the kids who are trying to work and when they get sick, not only are they falling behind in school academically, but they also can’t get a paycheck because they had to call in sick for that. I think this is going to mean the world to them.”

Wilson also said the biggest hurdles her organization had to overcome involved the spreading of misinformation from those who opposed the initiative.

“The opposition really worked hard in trying to make this message less about the people who deserve a living wage and more about businesses that they said that would suffer,” she said. “There’s actually no empirical evidence that suggests that this will happen. A lot of that was based on conjecture that has really not come to fruition. In fact, we’ve seen places and cities and states that have minimum wage and businesses thrive in those states.”

After Election Day, Arizona wasn’t the only state to increase minimum wage. Voters in Colorado, Maine and Washington voted to increase minimum wage as well, according to Ballotpedia.

ASU Young Democrats Vice President Zakary Ghali said he supported the increase of the minimum wage because it’s merited partially by the rising standard-of-living costs that college students face.

“I think everyone else supported it because they understood that working Arizonans needed more money in their pockets to support their families, and I think college students certainly are not the majority of low-to-minimum wage workers," he said. "I think that they will be able to reap the benefits of passing a slightly higher minimum wage when it comes to having to pay rent, paying tuition, etc.”

Ghali said the raised minimum wage could be useful for those on the cusp of being able to afford higher education.

“I hope that it’ll help people today, and it’ll help people tomorrow,” he said. “This really could make the difference between someone getting higher education or not, when you think about it.” 

Federalist Society ASU Chapter President Chase Turrentine said he opposes the concept of raised minimum wage because he sees it as a political move rather than an economic one.

“I’m in favor of no minimum wage at all,” he said. “Minimum wage legislation demonstrates a very clear misunderstanding of how pricing is set, and it tends to be a very political solution, in that it has — on its surface — an apparent value, but if you go any deeper below the surface it ends up being much more harmful than leaving it alone.”

Turrentine, who said he worked several jobs throughout his adolescence, said raising the minimum wage will shake a ladder of opportunity for young workers.

“I would not have gotten that McDonalds job if they had to pay me $12 an hour,” he said. “What’s going to happen is they’re going to hire adults. And the teenagers are going to miss out on the opportunity to work. If we cut that opportunity out for teenagers it essentially makes it impossible for the future to develop.”

Turrentine said the paid sick time off part of the initiative seems beneficial at the surface but could lead to long-term decline in labor force activity.

“I generally oppose any sort of mandate like that — when you start mandating things like that that costs money, what it does is it cuts into the ability of the employer to hire people,” he said. “I think we will see labor force participation rates to be really low, and as a result over the next 10-15 years, we will see labor force participation rates to be much lower than what they’ve been.”

Turrentine also said Prop. 206 will likely only help large corporations and hurt small businesses because established companies have more leeway with how they pay their employees.

“Large corporations have what’s called economies of scale,” he said. “The people who can’t afford it are the small businesses who don’t have economies of scale. The big beneficiaries are going to be larger corporations who already have established businesses. This makes it much, much harder for small businesses, or the local entrepreneurs or something like that to compete with these large companies."

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