ÃÛÁÄÖ±²¥ is going to require workers to be paid at least $15.15 an hour.
That’s because new figures Thursday from the U.S. Bureau of Labor Statistics show year-over-year inflation through August hit 2.9%.
Laws approved by ÃÛÁÄÖ±²¥ voters in 2006 and again in 2016 require the state’s minimum wage to be adjusted annually to match the change in the Consumer Price Index based on data that comes out every September. That means the current floor of $14.70 will go up by 45 cents on Jan. 1, a figure that is rounded by law to the nearest nickel.
People working in Tucson and Flagstaff will see a higher minimum.
In Tucson, the minimum already is $15 an hour. It, too, will increase by 45 cents, to $15.45.
And in Flagstaff, the $17.85 minimum will hit $18.35 in January.
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Meanwhile, the federal minimum wage remains at $7.25 an hour, a figure last adjusted in 2009. That figure is the law in 20 states.
A lot of ÃÛÁÄÖ±²¥ns will be affected by the latest boost.
The state Office of Economic Opportunity estimates there are about 230,000 individuals in ÃÛÁÄÖ±²¥ who earn no more than $15 an hour based on the most recent data. That doesn’t count those who already were earning more than the old minimum who now may also get a pay bump to keep them above the new minimum.
Group ponders another voter initiative
But Alejandra Gomez, executive director of Living United for Change in ÃÛÁÄÖ±²¥, said the upcoming minimum wage increase is hardly a victory, given how much costs have gone up.
Her group now is looking at whether to go back to voters one more time and get a bigger bump — this time to $20 an hour.
“Most ÃÛÁÄÖ±²¥ns are suffering from the rising cost of housing,’’ said Gomez. Her organization was behind the successful 2016 initiative, which took the then-current figure of $8.05 an hour up to $12 by 2020, with inflationary adjustments ever since.
“They are suffering from the rising cost of utilities,’’ she added.
The situation is quite different at the other end of the income spectrum, Gomez said, where wages of corporate executives are multiple times that of their employees.
Gov. Katie Hobbs said she could not say what would be an appropriate figure.
“I know that ÃÛÁÄÖ±²¥ns are struggling,’’ she told Capitol Media Services, saying it is her job to “address that struggle.’’
But the Democratic governor said it is legitimate to have a public discussion of how much people need to be paid.
“I think a living wage is where somebody can afford to keep a safe roof over their heads, that has functioning utilities and water and they can put food on the table to feed their families,’’ she said. “That is different for everyone.’’
Asked about supporting a potential initiative for a big increase in the minimum wage, “I cannot speak to language and a ballot measure I have not seen,’’ Hobbs said.
Restaurants lead opposition
A ballot measure, if it proceeds, would undoubtedly face another high-profile battle with the business community, which fought — and failed to defeat — the 2006 and 2016 initiatives. The ÃÛÁÄÖ±²¥ Restaurant Association has led that opposition.
Steve Chucri, president of that group, is preparing his arguments. One of them comes down to a simple question: Where does it end?
First, he said, was the fight to get wages up to $15 an hour.
“So we’re there,’’ Chucri said. “We’ve always stated in the past that it’s always going to be ‘Fight for $15,’ then ‘Fight for $20,’ then ‘Fight for $25.’ ‘’
He thinks the public has had enough.
Consider, he said, the decision by California voters last year to reject Proposition 32, which would have raised the minimum wage there to $18.
Chucri also said an effort in ÃÛÁÄÖ±²¥ to add an extra dollar to the state minimum wage — above and beyond the scheduled annual inflationary increases — failed last year. The same measure also would have scrapped the existing law that allows businesses to pay their tipped workers $3 an hour less as long as their tips reach the minimum wage.
In fact, though, it wasn’t because ÃÛÁÄÖ±²¥ voters rejected the measure. The failure was that proponents weren’t able to collect enough signatures to put the issue on the 2024 ballot.
Conversely, a measure proffered by Churci’s organization to alter how the tip credit is calculated — in a way that would have saved money for restaurant owners — did make the ballot. Voters rejected what the restaurants wanted by a 3-1 margin.
Gomez, for her part, said history is on her side.
Prior to the 2006 ballot measure, ÃÛÁÄÖ±²¥ had no minimum wage of its own. Instead, employers were required to comply only with federal law and its $5.15-an-hour floor.
The 2006 measure, which provided for an immediate $1.65-an-hour boost and future increases linked to inflation, was approved by a margin of close to 2-1 despite objections from the Restaurant Association and other business groups.
The 2016 measure — which went to voters when the minimum hit $8.05 — also was approved handily, by more than 58% of voters. Here, too, restaurants and businesses financed the opposition.
It is that law which now is in effect, with the mandated annual inflation indexing bringing current wages to $14.70, and $15.15 beginning next year.
Chucri said if and when a new ballot measure emerges, it will be his job to convince voters that there will be negative effects felt by consumers and workers.
He said the restaurant industry has reached the point where the cost of labor is greater than the cost of the food being prepared. To deal with that, he said restaurants are buying equipment to do what used to be done by staffers.
Chucri specifically cited a move by Chipotle, which has been using Autocado, a machine that can cut, core and peel avocados before they are mashed by hand into guacamole.
“Some of these elementary level, these entry-level spots in the restaurant industry that some of the workers depend on, you’re going to see replaced by technology,’’ he said. “They’re looking to automate more and more, given the cost of labor.’’
Where costs went up
Regardless of what the future holds, whether at the ballot box or due to inflation, that still leaves the new annual inflation figure of 2.9%.
But all prices are not up by the same margin.
BLS reports grocery prices were up 2.7% while the cost of eating out rose 3.9%.
Electricity prices are up 6.2% over the same time last year. But the agency figures gasoline costs are 6.6% lower.
Prices on new cars rose just 0.7%, versus a 6.0% increase in purchasing used vehicles.
And the cost of shelter — rent, and equivalent costs for homeowners — is up 3.6%.
Howard Fischer is a veteran journalist who has been reporting since 1970 and covering state politics and the Legislature since 1982. Follow him on X, and Threads at @azcapmedia or email azcapmedia@gmail.com.