PHOENIX (AP) — The minimum wage in Arizona rises 5 percent to $7.25 an hour on New Year’s Day, the third annual increase since voters approved the minimum-wage initiative by a 2-1 ratio in 2006.
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Many opponents of an annual minimum-wage adjustment object to Arizona’s minimum wage being tied to the Consumer Price Index because it generally increases.
The Employment Policies Institute in Washington says that minimum-wage hikes reduce jobs for those who are the least skilled and who need jobs the most, especially young minority workers and high-school dropouts.
It cites research estimating that for every 10 percent increase in the minimum wage, employment falls 8.5 percent for vulnerable groups.
The raise would mean extra costs of about $85,000 a year for a company with 20 entry-level employees, the institute said.
Scottsdale-based economist Elliott Pollack agrees that raising the minimum wage takes a toll on entry-level jobs.
“If you have a minimum-wage job, yeah, it (a raise) helps you,” he said. “But it actually reduces the number of minimum-wage jobs available.”
Pollack said such jobs are important for first-time workers because they teach basic skills like showing up for work on time.
However, few workers hold minimum-wage jobs. The Arizona Department of Commerce says the bottom 10 percent of workers earned $7.57 or less in 2007.
Not all employees are eligible for the rate. Tipped employees will earn $4.25 an hour, $3 below the minimum.
Julie Kossak, a co-owner of three Zpizza restaurants and Pink Spot Ice Cream in Phoenix, said minimum-wage increases hurt small businesses.
She has about 50 employees. To get good workers, she has to pay employees more than minimum wage. And even though she’s not required to give a raise next year, she said minimum-wage increases pressure small-business owners to keep raising wages.
“I’m not a fan of it (a minimum wage) anyway,” Kossak said. “I believe the market should take care of itself.”
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