Court sides with Flagstaff, protecting minimum wage

On Oct. 11, the Maricopa County Superior Court blocked an attempt from the state of Arizona that would have penalized Flagstaff for having a higher minimum wage than the state standard of $12.80 per hour. While the state can still appeal the ruling, Flagstaff is protected from the proposed charges for the time being. 

The $1.1 million charge was intended to cover indirect expenses from Flagstaff’s $15 per hour minimum wage since it was raised in 2016. For the state, these costs mainly include paying state independent contractors in Flagstaff the higher minimum wage. Judge James Smith ruled the penalty defied Proposition 202, a motion Flagstaff enacted in 2006 to change minimum wage based on the Consumer Price Index.

Freshman Mia Tucker said the raise helped her afford things she would not be able to purchase otherwise. Tucker worked at Little Caesars in Lake Havasu City where she was paid $12.15 per hour for her job as a manager. In Flagstaff, Tucker makes $15 per hour as a crew member with the same company.

“The raise has made it easier on me,” Tucker said. “I can now afford to do more for myself. Before, I couldn’t get money for a therapist medication or anything for my own health; now, I’m able to afford those things.”

Tucker said despite working at a lower-ranking position, she has been earning higher paychecks, allowing her to loosen her typically strict budget and increase savings for her studies. 

Moreover, sophomore Jacob Handley said Flagstaff’s minimum wage incentivizes him to work. Compared to his hometown — Boise, Idaho — where he was paid $10 per hour, Handley said the value of his labor is better reflected in Flagstaff. 

“That’s why I quit my job in Idaho,” Handley said. “It made no sense working when I felt like I wasn’t getting paid enough for what I was doing. If I was getting paid the same $10 per hour here, I wouldn’t have worked.”

Despite praise from Flagstaff workers, critics of minimum wage believe locals will not benefit from the higher earnings. 

Nancy Baca, senior lecturer in the W.A. Franke College of Business, said increased wages result in heightened prices for everyone. 

“Upping the minimum wage is never good from an economic perspective,” Baca said. “ I think it’s pretty commonly understood in our discipline that minimum wage and increasing minimum wage is not beneficial to the community.”

During the Flagstaff minimum wage bump in 2016, Baca said she noticed a rise in the prices of goods — despite her salary remaining the same. 

“The people who get the increase in minimum wage get a boost in their income, and then when the prices go up accordingly, they don’t actually end up better off or worse off,” Baca said. “But if you think about everyone else in that economy who didn’t get a bump in wages, they are now paying higher prices, and they don’t have a higher income.”

The raise in minimum wage has decreased the buying power of highly trained and educated individuals, Baca explained. While minimum wage workers will notice a rise in their spending ability, at least initially, Baca said it will level out from the increase in prices of consumer goods. 

For those who are apprehensive of how the higher minimum wage may affect Flagstaff’s economy, Baca said layoffs and business closures are legitimate concerns. 

“Locals should be worried,” Baca said. “We have actually seen a trend, even before COVID, of small businesses having to shut down or lay off employees because they simply couldn’t afford the labor, but here’s the thing; Flagstaff voted for the increase in minimum wage. Flagstaff voters brought it upon themselves simply because they did not understand the economics of the issue.”

As a scholar of economics, Baca said she wonders if she could have done more to educate Flagstaff voters on the effects a higher minimum wage may have on the community. 

“Maybe I’m partially to blame,” Baca said. “There wasn’t enough education on the other side; I assumed that people understood more about economics than they did.”

While Baca explained it is understandable to offer a raise to laborers who have gained experience or have more training, it is economically nonsensical to do it “just because.” On the other hand, some believe it is essential to raise the minimum wage, as consumer prices have continued to rise regardless of worker pay.

As Flagstaff locals experience the positive and negative effects of Maricopa County’s Superior Court ruling, the office of Gov. Doug Ducey has announced the governor’s intention to review the ruling. Flagstaff voters can find more information about Proposition 202 on the Arizona Secretary of State website.

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