Saying younger workers need jobs, a House panel voted Wednesday to allow Arizona companies to pay them less.
A lot less.
Legislation approved by the House Commerce Committee would set the minimum wage for anyone younger than 22 at 75 percent of what those 22 and older are required to be paid. With the state minimum wage at $7.25 an hour, that translates to $5.44.
The minimum wage for everyone else is pegged to inflation and would increase in January if the Industrial Commission finds that costs have gone up. HB2639 would track that increase and then cut it by 25 percent.
The exception would begin in January and last for three years.
Rep. Laurin Hendrix, R-Gilbert, who crafted the measure, conceded that Wednesday’s vote is legally meaningless for most Arizona businesses.
The federal minimum wage also happens to be $7.25 an hour. The only exception for youth is for those 19 and younger, who can be paid $4.25 an hour — but only for the first 90 calendar days of employment.
Hendrix said, though, federal laws apply only to businesses that have at least $500,000 worth of gross sales in any year and are involved in any way in interstate commerce.
But Hendrix said that still leaves some small companies that could take advantage of the legislation.
Hendrix said the change is designed to benefit younger workers. He said they have a higher unemployment rate than the rest of the working-age population.
But that’s not all. Hendrix said once they have jobs — even jobs that don’t pay the full minimum wage — it will “get them in the habit of going to work and developing a work ethic that will be useful to them later in their lives.”
The most recent figures breaking down unemployment by age from the U.S. Census Bureau show nearly 19 percent of those 16 through 19 who wanted work were unemployed in 2008. That’s at the time when the overall jobless rate for the state was 6.1 percent.
The figure for those 20 through 24 was 10.3 percent.
But Rebekah Friend, executive director of the state AFL-CIO, said that’s no excuse to pay them less.
“If you get up in the morning, you show up at a job, you should be able to make minimum wage,” she said.
“We’re not talking about some exorbitant ‘living wage,’” Friend said. The current figure, she noted, translates to just slightly more than $15,000 a year, before taxes.
Friend said this is little more than an effort to undermine the decision by voters in 2006 to create a state minimum wage and require annual increases tied to inflation. Various business groups tried at the time, unsuccessfully, to convince voters not to approve the change. So did Americans for Tax Reform, the national organization founded by Grover Norquist that asks lawmakers to sign pledges that they won’t raise taxes.
On Wednesday, Barry Aarons, who lobbies for Norquist’s group, was the only one to testify in favor of the sub-minimum wage for those younger than 22.
Aarons said the minimum wage “has its most devastating effect on young people in the job market.” The result, he said, is a widening gap between the overall jobless rate and the rate for teens.
While the AFL-CIO is opposed to any changes in the law, some of the Democrats on the committee said they are willing to consider some variant of what Hendrix wants.
Rep. Olivia Cajero Bedford, D-Tucson, said it’s wrong to think that anyone younger than 22 doesn’t need to be making at least the minimum wage. She said while some may be students, others may be married and trying to support families.
So what age makes sense to them?
“I’m thinking more along the lines of high school students at 18 or under,” said Rep. Chad Campbell, D-Phoenix. “That just makes more sense to me, as the majority of them are not independently supporting themselves.”
Anyone older than that, he said, should be earning the same as anyone else.
That’s also the assessment of Rep. Robert Meza, D-Phoenix.
The legislation has another problem: It seeks to partially overturn what voters approved in 2006. While the Arizona Constitution allows alterations to initiatives, that can be done only by a supermajority vote — and only if the change “furthers the purpose” of the initiative. Friend said this does not do that, and her organization would sue.
Hendrix does have a backup plan. He convinced committee members to also approve HCR2043, which would send the question to voters in November.
Both measures now go to the full House.