Workers at the bottom end of the pay scale should probably not be counting on the government to get them a pay raise, at least not this year. The director of the Arizona Industrial Commission said the figures she has seen so far suggest there will be no automatic increase in the state minimum wage.
Workers at the bottom end of the pay scale should probably not be counting on the government to get them a pay raise, at least not this year.
The director of the Arizona Industrial Commission said the figures she has seen so far suggest there will be no automatic increase in the state minimum wage. Laura McGrory said that’s because the cost of living in Arizona this year appears to be no higher than it was last year.
In fact, she said, the trend actually is in the other direction.
McGrory said her predictions are based on preliminary comparisons between July 2009 and the same period a year earlier. But she said nothing is final yet, as the state’s minimum wage law requires that the calculation be done based on August figures, numbers, she said, which will not be finalized until later this month.
If McGrory is right, that could be good news for many businesses that fought the 2006 ballot measure, unsuccessfully, that imposed Arizona’s first-ever minimum wage.
About the only positive spin about this for those workers who are currently earning $7.25 an hour is that, even with the cost of living actually having decreased, their pay can’t go down. McGrory said the 2006 initiative refers only to increases in the minimum wage tied to inflation, with no mention of decreases.
And, for practical purposes, it wouldn’t matter anyway for virtually all minimum wage workers, at least not this year: That $7.25 an hour figure is the same as the federal minimum wage. And only very small firms that don’t do anything involving interstate commerce are exempt from complying with that law.
Prior to 2006, Arizona had no minimum wage of its own. Most employers in the state were covered only by federal law, which required that workers be paid at least $5.15 an hour.
The initiative set the state minimum wage at $6.75 an hour beginning in 2007. But the law also requires the Industrial Commission to provide annual cost-of-living increases, computed according to the Consumer Price Index published by the U.S. Department of Labor.
For 2008, that computed out to 2 percent, or 13.5 cents an hour. But workers got 15 cents because the law requires adjustments to be rounded to the nearest nickel.
Last year, with inflation running 5.4 percent, the commission decreed that the 2009 Arizona minimum wage should be $7.25 an hour. That actually gave Arizona workers a jump over employees elsewhere who didn’t get that much until the federal minimum wage hit that figure in July.
While the figures are currently the same, Congress has not approved future increases. And that, once again, puts the commission in the driver’s seat when it comes to what Arizonans are going to be paid beginning Jan. 1, 2010.
McGrory said while the 2006 law refers only to inflation-adjusted increases, the final decision on exactly how the statute works is not hers.
She said commissioners will get those cost-of-living figures later this month.
“I have no doubt that the question will come up about whether the minimum wage should be decreased,” McGrory said.
“But I get back to the statute,” she continued. “And there is no language in the statute about decreasing. It talks solely in the context of increasing.”
That, however, is not the way it works everywhere.
Colorado’s law also ties changes in that state’s minimum wage to the cost of living. But the wording of that statute allows adjustments both up and down.
Officials in Colorado, using the inflation figures for the Denver metro area, are calculating that living costs actually declined 0.6 percent. And while that calculates out at more than four cents off the current $7.28 an hour minimum wage, the cut is capped at three cents because the state can’t go below that $7.25-an-hour federal minimum.