Battle over Flagstaff's minimum wage continues

The new "Sustainable Wages Initiative," which may affect tipped workers by increasing the minimum hourly wage by fifty cents, will appear on the ballot in November. Photo taken 9 September 2018.

The future of Flagstaff’s minimum wage will once again be up for voters to decide in November. Since the passage of Proposition 414 in the November 2016 election, the minimum wage in Flagstaff has grown from $8.05 per hour to the current rate of $11 per hour — a 37 percent increase.

It is set to rise to $15.50 per hour by Jan. 1, 2022. Following 2022, the minimum wage in Flagstaff will be adjusted to match the cost of living.

However, the current wage and what it is set to be raised to are being challenged by an initiative on this November’s ballot, known as Proposition 418.

Also known as the Sustainable Wages Act, 418 would amend the current minimum wage laws in multiple ways. Most notably, it would equalize Flagstaff’s minimum wage with the rest of the state until 2021, where it would then be raised to $0.50 above the state’s minimum wage.

Currently the state minimum wage is set at $10.50 per hour according to the Industrial Commission of Arizona.

Elevate Flagstaff is the driving political force behind Proposition 418. Stuart McDaniel, director of Elevate Flagstaff, has led them along the way and strongly advocates for changing the current minimum wage policy.

“We’ve been seeing the negative effects of Prop 414 for the past two years,” said McDaniel. “Not only has it resulted in increased costs on goods and services, it is also harder to get jobs because there are less of them.”

In addition, he claimed there was low employment on the basis that businesses can not afford to hire new workers and are struggling to keep the employees they currently have.

City Council member Eva Putzova begs to differ. Also a director of the group responsible for the campaign against Proposition 418, known as Flagstaff Needs a Raise, Putzova stated unemployment was at a 10-year low in Flagstaff.

According to the Bureau of Labor Statistics, Flagstaff’s unemployment rate was at 4.7 percent as of June 2018. February 2008 was the last time the unemployment rate matched this percentage.

Tipped workers will see their wages adjusted by 418 as well, if approved. Everyone from servers, bartenders, car wash attendants and hair stylists will have their pay set $3 below the minimum wage, and their tips will no longer be seen as their sole property.

“If the law stands where it is now, tipped workers will just make hourly wage. It will have a detrimental effect on them if Proposition 418 does not pass” McDaniel said.

Putzova emphasized the importance of reducing dependence on tips in order for workers to live on a more stable income.

“Tipped workers in Flagstaff use food stamps at twice the rate of workers in the rest of Arizona,” said Putzova.

She also brought up harassment, a factor which does not get talked about much concerning this issue.

A majority of tipped workers are women. Putzova explained these women are subjected to higher rates of sexual harassment because they rely on tips for most of their income and are forced to tolerate improper behavior from customers, managers and sometimes co-workers to earn a living.

“In seven states that guarantee the full minimum wage plus tips, sexual harassment claims are reduced by half,” Putzova said.

In addition, Proposition 418 will remove the guarantee of overtime pay at employees’ normal rate of pay or minimum wage, allowing businesses to pay their employees at the same rate despite working overtime hours.

Local government oversight regarding minimum wage will be altered by Proposition 418 as well.

An Office of Labor Standards was established in Flagstaff by Proposition 414 to enforce the new law and protect workers against wage theft or forcing a worker to work off the clock. The office works in association with the city attorney.

Several dozen complaints have been filed with the office to date. Under Proposition 418, the Office of Labor Standards and city attorney will no longer be responsible for enforcing or investigating issues related to minimum wage laws.

McDaniel asserts Proposition 418 will rescue the economy and protect jobs, claiming that businesses are looking to set up shop elsewhere due to the high and seemingly unsustainable minimum wage in Flagstaff.

Joe Bader, also from the Flagstaff Needs a Raise campaign, warned of possible negative impacts that he thought Proposition 418 could have on the economy.

“It would reduce consumer demand that we have in the economy now because of the higher wages,” said Bader. “The more money people make the more they’ll put in into the local economy, otherwise they are forced to save more and spend less, which hurts local businesses.”

Minimum wage impacts the standard of living for thousands of Flagstaff residents. Deciding how much income employees receive will cause ripple effects in the economy, determine prices for goods and impact business strategies for the foreseeable future.

Ultimately, it will be up to voters to decide whether workers continue to receive a minimum wage above the state’s or if Flagstaff’s minimum wage will match the state’s.