Arizona Minimum Wage and Paid Time Off, Proposition 206 (2016)

Arizona Proposition 206
Election date November 8, 2016
Topic Minimum wage
Status a Approved
Type State statute	Origin Citizens

2016 measures
May 17
Proposition 123 a
Proposition 124 a
November 8
Proposition 205 d
Proposition 206 a
Polls
Voter guides
Campaign finance
Signature costs

The Minimum Wage and Paid Time Off Initiative, also known as Proposition 206, was on the November 8, 2016, ballot in Arizona as an initiated state statute. It was approved.

A "yes" vote supported raising the minimum wage to $10 in 2017, and then incrementally to $12 by 2020, and creating a right to paid sick time off from employment.

A "no" vote opposed this measure, keeping the minimum wage at $8.05, adjusted for cost of living, and retaining employers' ability to decide whether or not to offer paid sick time off.

In November 2016, voters in Colorado and Maine also voted on measures to increase their state minimum wages to $12. In Washington, citizens voted on an initiative to increase the minimum wage to $13.50. All three measures were approved.

The initiative's paid sick time provisions went into effect on July 1, 2017.

Aftermath

  

Lawsuit overview
Issue: Constitutionality of the measure; Whether the measure creates new costs without providing new revenue sources (which is banned by the state's initiative law) and whether the initiative violated the state's single-subject rule
Court: Maricopa County Superior Court and Arizona Supreme Court
Ruling: Proposition 206 is constitutional.
Plaintiff(s): Jane Ann Riddle, William L. Riddle, III, Valle Luna, Charlottee Chester, Arizona Chamber of Commerce and Industry, Greater Phoenix Chamber of Commerce, Tucson Hispanic Chamber of Commerce, Greater Flagstaff Chamber of Commerce, Arizona Licensed Beverage Association, Arizona Restaurant Association, Yuma County Chamber of Commerce, Marc Community Resources, Inc., Arizona Free Enterprise Club, and Abrio Family Services and Supports, Inc.	Defendant(s): State of Arizona, Industrial Commission of Arizona, Arizona Health Care Cost Containment System, Thomas J. Betlach, Arizona Department of Administration, Craig C. Brown, and Arizonans for Fair Wages and Health Families
Plaintiff argument: The initiative unconstitutionally created new costs to the general fund without providing a new revenue source, and the initiative violated the state's single-subject rule since it was about the minimum wage and paid sick leave.	Defendant argument: The measure is constitutional.

  Source: The Arizona Republic

On December 15, 2016, business groups filed litigation to overturn Proposition 206. The Goldwater Institute, Senate President Steve Yarbrough (R-17), and House Speaker J.D. Mesnard (R-17) filed briefs in support of the challenge to Proposition 206.

The measure was contested by the petitioners for two reasons. First, plaintiffs said that Proposition 206 was not a single-subject initiative; rather, the measure addressed the two subjects of minimum wage and paid sick leave. Second, plaintiffs stated that the initiative created new costs to the general fund, as the state needed to pay some state contractors more, without providing a new revenue source. Section 23 of Article 9 of the Arizona Constitution requires that initiatives increasing state expenditures must identify a revenue source.

Judge Daniel Kiley of the Maricopa County Superior Court set a hearing for December 20, 2016. On December 21, Judge Kiley rejected the plaintiffs challenge to Proposition 206, thus upholding the ballot initiative. Plaintiffs announced that they would appeal the ruling.

On December 28, 2016, the Arizona Supreme Court agreed to take up the case. The court refused to place an injunction on the initiative, allowing the minimum wage increased to $10 on January 1, 2017. Oral arguments were scheduled for March 9, 2017. Chief Justice Scott Bales said that arguments would be limited to whether the initiative violated the state constitution through creating new costs to the general fund without providing a new revenue source.

On March 14, 2017, the seven justices of the Arizona Supreme Court unanimously rejected the argument that Proposition 206 was unconstitutional. Gov. Doug Ducey (R) responded to the ruling, saying, "The Supreme Court has spoken. We're going to follow the law." Glenn Hamer, CEO of the Arizona Chamber of Commerce, stated, "While we’re disappointed that the result did not go our way, we respect the court’s ruling." Tomas Robles, chairperson of the campaign that supported Proposition 206, said, "We are very proud and ecstatic that Prop 206 will remain intact, and will continue to benefit the families and workers of this great state."

Election results

Proposition 206
Result		Votes	Percentage
a Yes		1,465,639	58.33%
No		1,046,945	41.67%

Election results from Arizona Secretary of State

Overview

Minimum wage in Arizona

Arizona's minimum wage was $8.05 per hour in 2016. The federal minimum wage was $7.25. Due to Proposition 202 of 2006, the state's minimum wage increased with the cost-of-living. Without Proposition 206, Arizona's minimum wage was expected to increase to $8.15 in 2017. In November 2016, voters in Flagstaff, Arizona, voted on and approved a measure increasing their city's minimum wage to $15 an hour.

Initiative design

Proposition 206 was designed to increase the minimum wage to $10 in 2017, $10.50 in 2018, $11.00 in 2019, and $12 in 2020. Starting in 2021, the measure increased the minimum wage with the cost of living. The measure retained Arizona's law regarding tipping, which permitted employers to pay employees who receive tips up to $3.00 less than the minimum wage.

The initiative also guaranteed 40 hours of annual paid sick time to employees of businesses with 15 or more employees and 24 hours to those of businesses with less than 15 employees. The measure entitled employees to accrue one hour of paid sick time for every 30 hours worked. The measure permitted earned paid sick time to be utilized for an employee’s medical care, an employee’s need to care for a family member, a public health emergency, or addressing domestic violence.

State of ballot measure campaigns

Supporters raised $4.36 million in funds. Living United for Change in Arizona donated $1.9 million to the campaign. The Arizona Chamber of Commerce launched an opposition campaign, Protect Arizona Jobs, which received $46,677. Polls indicated that around 56 percent of Arizonans supported Proposition 206 prior to the election.

Text of measure

Ballot title

The ballot title was as follows:

“

INCREASES THE MINIMUM WAGE FROM $8.05 PER HOUR IN 2016 TO $12.00 PER HOUR BY 2020 AND ESTABLISHES THE RIGHT TO EARN PAID SICK TIME AWAY FROM EMPLOYMENT. A “yes” vote shall have the effect of increasing the minimum wage from $8.05 per hour in 2016 to $10.00 per hour in 2017, and then incrementally increasing the minimum wage to $12.00 per hour by the year 2020; entitles employees to earn 1 hour of paid sick time for every 30 hours worked with limits based upon the size of the employer; broadly defining the conditions under which paid sick time may be taken, including mental or physical illness, care of a family member, a public health emergency, or absence due to domestic violence, sexual violence, abuse or stalking; prohibiting various forms of retaliation against employees for exercising any rights under the law; and requiring employers to provide various notices to employees about the law. A “no” vote shall have the effect of retaining the existing minimum wage (along with the existing method for annually increasing the minimum wage for inflation) and retaining employers’ existing ability to determine their own earned paid sick leave policy.

”

Ballot summary

The ballot summary was as follows:

“

The Fair Wages and Healthy Families Initiative increases minimum wage to $10 in 2017 then gradually to $12 by 2020; provides 40 hours annual “earned paid sick time” for employees of large employers (24 hours for those of small employers); time accrues at one hour earned for every 30 hours worked; time may be used to address circumstances caused by illness of employee or employee’s family, public health emergencies, or domestic violence; prohibits retaliating against employees using the benefit; allows for more generous paid time-off policies; and exempts employees who expressly waive the benefit under collective bargaining agreements.

”

Full text

The full text of the measure can be found here.

Fiscal analysis

See also: Fiscal analysis statement

An extended summary of the fiscal analysis statement can be found here.

Support

Arizonans for Fair Wages and Healthy Families led the campaign in support of Proposition 206.

Supporters

Officials

• U.S. Rep. Ann Kirkpatrick (D-1)
• U.S. Rep. Raul Grijalva (D-3)
• U.S. Rep. Ruben Gallego (D-7)
• Rep. Charlene Fernandez (D-4)
• Rep. Reginald Bolding (D-27)
• Rep. Macario Saldate (D-3)
• Sen. Barbara McGuire (D-8)
• Sen. Katie Hobbs (D-24)
• Sen. Martin Quezada (D-29)
• Phoenix Mayor Greg Stanton (D)
• Phoenix Vice Mayor Kate Gallego
• Flagstaff City Council Member Eva Putzova
• Maricopa County Supervisor Steve Gallardo
• Tempe City Council Member Lauren Kuby
• Mayor Jonathan Rothschild (D), Tucson
• Tucson City Council Member Regina Romero

Former officials

• Rep. Phil Lopes (D-27)

Organizations

• Arizona Democratic Party
• Arizona Advocacy Network (AZAN)
• Arizona Coalition to End Sexual and Domestic Violence
• Arizona Education Association
• Arizona Faith Network
• Catalina In-Home Service, Inc.
• Central Arizonans for a Sustainable Economy (CASE)
• Changing Hands Bookstore
• Chicanos Por La Causa
• Fair Trade Cafe
• La Machine
• Living United for Change in Arizona (LUCHA)
• Mi Familia Vota
• National Employment Law Project
• Neighborhood Ministries
• Nuñez Law Firm
• One Arizona
• Planned Parenthood Arizona
• Protecting Arizona’s Family Coalition (PAFCO)

Unions

• AFL-CIO
• American Federation of State, County and Municipal Employees (AFSCME)
• Arizona Building Trades & Construction Council
• Pima Area Labor Federation
• United Food and Commercial Workers (UFCW)
• UNITE HERE

Arguments

Supporters made the following arguments in support of Proposition 206:

• The proposition would “ensure that more families can meet their basic needs and lead healthier lives.”
• The proposition would decrease poverty in Arizona.
• The proposition would give more opportunities to working-class families.
• The proposition would increase consumer purchasing-power and help small businesses.

U.S. Rep. Ann Kirkpatrick (D-1), who campaigned for a U.S. Senate seat against incumbent John McCain (R), endorsed Proposition 206. She stated:

“

No one who works 40 hours a week should have to live in poverty and decide between buying groceries, medicine or paying the bills. Raising the minimum wage offers hardworking families the opportunity to put food on the table, care for their children, and creates a better future for our state.

”

Tomas Robles, campaign manager for Arizonans for Fair Wages and Healthy Families, said:

“

We feel that this wage increase is that happy medium that protects small business and helps workers who can’t pay their rent at the end of the month even though they work full time.

”

Bill Scheel, a consultant speaking on behalf of the campaign, said:

“

Arizona workers have been falling farther and father behind in terms of their economic stability, and we need higher wages so that people can afford a place to live, pay for groceries and stimulate the economy to create more jobs.

”

Former Rep. Phil Lopes (D-27) of Tucson, Arizona, stated:

“

At the same time, Prop. 206 is opening up opportunities for our economy to flourish. Consider the increase in purchasing power for our working families after a wage increase. Businesses, small and large, stand to gain from customers with higher wages as those customers spend more on goods and services.

”

Arguments filed in support

The following arguments were filed with the Arizona Secretary of State's office in support:

“ In 2007, struck with an entrepreneurial bug and passion for coffee, I became the owner of Fair Trade Cafe, which now has two locations in downtown Phoenix. That’s when I saw that the American dream is out of reach for many others here in Arizona – in part, because of the policies that make it harder for families to stay afloat, let alone get ahead. This November, we’ll have an opportunity to turn this around. I’m proud to support this initiative that will provide families in our state with two commonsense policies – a gradual increase in the minimum wage and a standard paid sick days policy. Paired together, these policies will ensure that more families can meet their basic needs and lead healthier lives. Here in Arizona, a person paid the minimum wage will make only $17,000 a year. That’s simply not enough to get by in 2016. Worst yet, almost half of Arizonans can’t earn paid sick days to care for themselves or an ill family member. Families are left with impossible choices – go to work sick and potentially infect others, or risk a portion of a much-needed paycheck. As a mother of three, I know what it’s like to wake up in the morning to a coughing, sneezing, aching child. Life happens! And when it does, parents need to be able to care for their sick child without fear of losing their job. I’m proud to pay all my employees a living wage, and I know many of my fellow small business owners in Arizona feel the same way. However, this should be the rule and not the exception. A statewide policy will ensure that our neighbors, our friends, and our children can provide for themselves and their family. ” —Stephanie Vasquez, Owner, Fair Trade Cafe “ Healthy Working Families Initiative Will Strengthen Local Small Businesses The Healthy Working Families Initiative strengthens families, builds local businesses, and bolsters our communities and our state. I am proud to support this essential campaign. Since becoming involved in championing earned sick days, I have seen the benefits that these workforce protections afford Arizona families and business owners. These protections raise the quality of life in our community and make it a more desirable place to live, work, and run a business. Changing Hands is a local Tempe business that best illustrates this story. A popular locally owned bookstore, Changing Hands competes against the online retailer giant Amazon. The bookstore provides earned sick days for its team members and pays hourly rates above minimum wage—because they know that paying a fair wage and offering workers time off when sick or in need to care for a family member actually help their business. Consequently, their staff is happy, healthy, and productive. This booming local business attributes their success—and their ability to compete with Amazon—to attracting and retaining a top-notch team. Changing Hands’ staff turnover is low and retention is high, reducing costs related to hiring and training new employees. Small, locally owned businesses are the backbone of Arizona’s economy. The Healthy Working Families Initiative will help local businesses and the people that work for them. You can only say YES to that, as so many businesses have. Please stand with me and vote YES on the Arizona Healthy Working Families Initiative. ” —Lauren Kuby, Councilmember, City of Tempe “ Help Working Moms Pay Bills AND Put Food on the Table As any mom knows, having a family comes with lots of decisions. Decisions about child care, which school to attend, what to make for dinner. It’s endless. One decision no parent should have to make is whether to put food on the dinner table or pay the mortgage and utility bill. Startlingly, this is exactly the decision many hard working Arizonans have to make on a daily basis. The current minimum wage in Arizona is $8.05, which puts a family of four living barely above the poverty level. This is not good enough. The Healthy Working Families Initiative provides a reasonable, gradual increase to Arizona’s minimum wage as well as providing earned sick days for workers. This will impact over a million hard working people in our state. It will lift up hardworking Arizonans, building happy, healthy and strong families. And that’s good for our state. Join me in supporting the Arizona Healthy Working Families Initiative on November 8th. ” —Katie Hobbs, Social Worker, Arizona Senate Minority Leader “ Healthy Families Initiative Will Carry on the Legacy of Cesar Chavez and Helen Chavez For years my grandparents, Cesar Chavez and the late Helen Chavez, proudly fought for treating America’s farm workers with dignity and respect. With her working the fields and taking care of the children and home, my grandfather fought passionately for a respectful and equitable society. The message resonated with thousands of workers and millions of Americans who eventually all came together, standing up for respectable working standards and a fair wage. Today, half a century later, we continue to face the same issue of earning a fair wage. Families across the state are struggling to earn the bare minimum that is required for a healthy community. In addition, the lack of paid sick days forces desperate workers to work while ill, causing a great concern for public health, putting our children and elderly at risk. The Arizona Healthy Working Families Initiative will increase our minimum wage to $10/hour in 2017 then gradually to $12 by 2020. The initiative will allow workers to earn up to five days of sick pay every year that can be used for their own health needs or to care for a sick child or family member. I urge you to vote yes on the Healthy Families Initiative to create an economically strong state and create a sustainable Arizona where every worker and family can rise above a bare minimum. ” —Alejandro Chavez, Phoenix, AZ “ Flagstaff families will benefit from Healthy Families Initiative In Arizona, we understand that a strong community starts with a healthy family that provides the economic stability for children to grow and become contributing members of society. But today, too many hard working families simply can’t get ahead. They juggle multiple jobs while often earning less than $17,000 a year—an amount that a full time job pays at the current minimum wage rate. This is a starvation wage not only in Flagstaff where the cost of living is already sky-high but also in communities across the state. And many employees can’t get paid time off if they are sick or have to take care of a sick child. In fact, 45 percent of Arizonans— more than 934,000 people—don’t have access to earned paid sick days. Earned sick days are a public health issue. People who work hard preparing and serving food or taking care of the elderly or children should be able to stay home when they are sick. When parents can’t afford to take time off to care for their sick children, children go to school, which makes it harder to learn, and easier to spread illness. Lack of access to paid sick leave drives our state’s productivity and economic output down and nobody benefits. The Healthy Working Families Initiative will help a million hard working Arizonans by giving a reasonable, gradual increase to the minimum wage and providing 3-5 earned sick days a year. That’s good for Flagstaff and good for Arizona. Join me in supporting our hard working Arizona families by voting for this vital Initiative. You’ll help our families and the entire state. Vote Yes on November 8th. ” —Eva Putzova, Flagstaff City Councilmember, Flagstaff “ Home Care CEO Touts Healthy Wages for Healthy Workers I am the founder, owner and CEO of Catalina In‑Home Services and I support the Healthy Families Initiative because it’s good for business. Having run my business for more than 35 years, I know how expensive and time‑consuming it is to replace employees and train new ones. The Healthy Families Initiative will help businesses like mine to save time and money by improving staff retention and job performance. From Day One in my business, I've paid above minimum wage to the entry‑level direct care workers I employ. One of my longest‑term goals has been to set professional standards for this work – and one cannot generate a professional approach to the work when paying workers the current minimum wage allowed by law. Daily, I see the impact low wages have on my employees’ lives when they work two or three jobs, struggling with the stress that comes with putting food on the table, raising children, and paying the rent. When employees come to work rested and less stressed, they deliver better care, better customer service, and increased loyalty, which allows our company to grow. For dedicating their time, energy, empathy, and compassion to our clients, employees deserve higher wages, and the opportunity to be paid for sick days. This initiative empowers my employees with the fairness of their compensation, and their increased capacity to raise healthy families. It also helps to level the playing field for all businesses like mine. I support the Healthy Families Initiative. It assures that thousands of other businesses provide their employees what they deserve to earn. Hardworking women and men deserve no less than a living wage in the U.S.A. ” —Judy Clinco, Founder and CEO of Catalina In-Home Services, Inc., Tucson “ Working Women Will Benefit Greatly From Prop. 206 The Arizona Healthy Working Families Initiative is vital in uplifting Arizona’s hard working families so that they may become economically stable, while not having to sacrifice their health. Families and individuals should not be forced to choose between going to work sick or missing out on a day’s worth of pay. Prop. 206 will gradually raise the minimum wage to $12 an hour while providing employees up to 3 or 5 days of earned sick leave. The initiative will directly benefit over a million Arizonans, while also helping boost our economy. Among those most deeply affected by the Healthy Working Families Initiative are women, making up 70% of those who directly benefit from the initiative. Passing Prop. 206 will be one of many steps in establishing economic equality and stability for women across the state. Prop. 206 goes beyond helping families succeed, but also empowers small businesses by helping them grow their customer base. As those million-plus Arizonans gain access to higher wages, they will in turn spend those dollars across the state economy driving up demand and customers for small businesses. Businesses will not lose money, but instead witness higher earnings and demand for their goods and services. Please join me in voting yes on Prop. 206. ” —Steve Gallardo, Maricopa County Supervisor, District 5 “ Student Rallies for Wage Increase, Sick Day Relief Growing up with parents who struggled to provide for our family has motivated me to work hard and build a better life for myself through education. I am looking forward to one day completing my college degree, becoming a productive member of society and helping others achieve their goals. But getting there has not been easy. As a full-time student living on my own, I have to find ways to pay for food and rent in between classes while carrying the worries of paying off my student loan debt into the future. The truth of the matter is that the current minimum wage just isn’t enough to meet basic standards of living for Arizonans like me. Not having the option to earn sick days as I work and go to school also makes life challenging knowing that an emergency or health setback could suddenly diminish my ability to support myself on any given day. It could mean the loss of much-needed funds to pay for food, school, and bills; or even worse – losing my job altogether. This is why I’m supporting the Healthy Families initiative to raise the minimum wage in Arizona to $12 by 2020 and guarantee earned sick days to all workers across the state. It will make a real difference to me and others who are working hard to improve our standard of living and lead healthy lives. ” —James Myers, College Student, Avondale, AZ

Opposition

Protect Arizona Jobs, also known as Vote No on Prop 206, led the campaign in opposition to Proposition 206.

The Arizona Chamber of Commerce and Industry launched the campaign on September 19, 2016.

Opponents

Officials

• U.S. Sen. John McCain

Organizations

• Greater Phoenix Chamber of Commerce
• Americans for Prosperity, Arizona Chapter
• Arizona Farm Bureau
• Western Growers
• Fountain Hills Chamber of Commerce

Arguments

Opponents made the following arguments in opposition to Proposition 206:

• The proposition would decrease employment and increase prices for consumers.
• The proposition would encourage restaurants to implement more automation, putting people out of work.
• The proposition places Arizona at a “competitive disadvantage against other states in attracting businesses.”
• The proposition takes a one-size-fits-all approach when urban and rural areas have different costs of living.

U.S. Sen. John McCain (R), who was up for re-election against U.S. Rep. Ann Kirkpatrick (D-1), came out in opposition to Proposition 206, stating:

“

Twice I’ve talked to groups of franchisees here in Arizona, Taco Bell and McDonalds, those places that give you the first rung on the ladder. They said, ‘Fine. The next time you drive up to a window, you won’t be talking to a person. The next time you they hand you a hamburger and French fries, it will come out a slot.' … They have a certain profit margin. They cannot raise their cost of their product or people will stop purchasing it. So what are they going to do? They’re going to automate. So somebody is going to have to convince me that it’s good for employment in America, and I don’t think it is.

”

Mike Huckins, Vice President of the Greater Phoenix Chamber of Commerce, said:

“

[T]his measure has the potential to eliminate more jobs than it would create. In addition, it does nothing to address local governments adopting a higher minimum wage above what this measure calls for, furthering the dangerous potential for a patchwork of wage and benefit policies across the state. ... Passing this measure would have negative consequences, not only from the perspective of the workers the wage increase is intended to benefit, but also for our state’s economy.

”

Matthew Glans, Senior Policy Analyst at The Heartland Institute, said:

“

Evidence shows increasing minimum-wage laws is not an effective way to address poverty and often creates barriers to entry for workers with less skill and education. In a 2010 study, economists at Cornell University and American University found no reduction in poverty in the 28 states that raised their minimum wage between 2003 and 2007. Promises to raise the minimum wage are often used as a get-out-the-vote tool, but that decision is nothing more than a shortsighted move that could cause real harm for the U.S. economy. To maintain profitability, businesses forced to raise their wages beyond market rates must make adjustments elsewhere. These cuts typically lead to reduced hiring, fewer work hours for employees, diminished fringe benefits for employees, and higher prices for consumers.

”

Tom Nassif, President and CEO of Western Growers, stated:

“

Proposition 206 will hurt Arizona’s farmers and the rural economies dependent on these family businesses. Labor is the single largest line item in a farmer’s budget; simple economics dictates that increasing such costs by nearly 50 percent will cause people to lose their jobs. The truth is, many family farmers, still recovering from the recession, will not be able to absorb the added financial and regulatory burdens of Proposition 206 and will be forced to eliminate countless jobs they currently provide to farmworkers. Furthermore, the cost of living disparity between rural and urban Arizona makes a one-size-fits-all minimum wage law fundamentally unfair to farming businesses in rural communities.

”

Arguments filed in opposition

The following were some of the arguments filed with the Arizona Secretary of State's office in opposition:

“ VOTE NO ON NEW JOB CREATOR MANDATES The Arizona Chamber of Commerce and Industry urges you to vote no on new mandates on job creators. If passed, the very people the proposition’s out-of-state labor union supporters claim to want to help will be the most harmed. The poor, young people and those with few skills who would benefit most from an entry-level job will find themselves shut out of the job market as employers will have fewer dollars to devote to new hires. This proposition would dramatically raise the minimum wage by nearly 50 percent, impose new mandates on employers for employee leave, and would allow cities to form their own wage ordinances. Business faced with the extreme hike in costs and new workplace mandates will be left with bad options. Employers could cut lay off employees, raise prices, institute hiring freezes, invest in automation that will make employees unnecessary, or even close up shop. These new costs will particularly difficult for small businesses to absorb. For those on the outside of the job market looking in, like teenagers, the news is even worse. Each 10 percent hike in the minimum wage causes a 1-2 percent drop in youth employment. Proving that the minimum wage destroys opportunity, teenage unemployment is a whopping 16 percent right now. Higher minimum wages make teens’ ability to break into the job market even more difficult. Arizona already has a minimum wage higher than the federal mandate that is adjusted annually for the cost of living. This proposed dramatic mandated wage spike would only worsen our rotten labor participation rate that currently sits at a level not seen since the 1970s. This proposition is bad for job creators and job seekers. We urge you to vote no. ” —Glenn Hamer, CEO, and Dennis Dahlen, Chairman “ The Arizona Farm Bureau opposes The Fair Wages and Healthy Families Act (I-24-2016) Economists have legitimate disagreements as to both the positive and negative impacts of minimum wage increases. Predicting outcomes on any new proposal is just that - a guessing game. Where does it wash between those who are better off with more income and those with job losses because of the increase? Anyone who says they know, in advance, don't know. There are simply too many variables and too many unknowns. It is clear from economic literature that small and measured minimum wage increases tied to inflation, more correctly move with market principles and cause less economic distortions. Arizona has in place a system indexed to inflation. Combining this approach with earned tax credits for those struggling to earn a living wage, in a studied manner seems more reasonable - not perfect, but more reasonable. An initiative that simply throws numbers against the wall is not a studied approach. Perhaps the greater good is a cost that should be shifted to the public, rather than simply piling upon the employers. ” —Kevin Rogers, Gilbert and James Klinker, Gilbert “ The Greater Phoenix Chamber of Commerce opposes the Fair Wages and Healthy Families Act. The proposal mandates a $12 per hour minimum wage in Arizona by 2020. Furthermore, the proposition increases burdens on employers by requiring mandatory paid sick time for all employees. Arizona’s minimum wage law already allows for annual hourly wage increases that are far above the federal minimum wage. If this proposition passes, the minimum wage in our state will increase by nearly 50 percent in just four years. It is understood that minimum wage laws have negative economic consequences and often hurt those most that they are intended to help. Minimum wage hikes typically have no net effect on low-income families and do little, if anything, to reduce poverty rates. Our chamber, through Phoenix Forward, our economic development platform, is working to create job opportunities - not establish an arbitrary wage floor. Artificially inflating labor costs forces business owners to lay off workers, reduce hours or increases prices. Often, the only solution that remains is a combination of all three of those jobkilling options. In addition, this proposition places Arizona at a competitive disadvantage against other states in attracting businesses here that are looking to expand operations. This proposition places undue regulatory and bureaucratic burdens on employers because it empowers local governments to raise the minimum wage and paid sick time levels above the state minimum. This can create a patchwork of employment laws across our state that would be almost impossible for business to navigate successfully. This proposal is bad for businesses, bad for employees it is designed to help and bad for the state. We urge you to join business in voting NO ” —Daniel Froetscher, Chairman of the Board, and Todd Sanders, President & CEO “ The Arizona chapter of Americans for Prosperity is strongly against this proposition, which would kill job opportunities for workers in Arizona, especially for young people and low-skilled workers who are trying to climb onto the bottom rungs of the career ladder. Contrary to what the advocates of this proposal claim, this initiative would substantially harm Arizonans by: Increasing the prices of your goods and services; Decreasing number of hours worked for hourly employees; Eliminating jobs and freezing new employee hires; Possibly leading to more automation, especially in the restaurant industry. This is basic economics. Two years ago, 500 economists from across the political spectrum sent a letter to President Obama saying his wage increase to $10.10 would result in higher unemployment. Additionally, an analysis of wage increases since 1990 found that 85% of the economic studies had convincing evidence of job losses for low-skilled workers. Raising the minimum wage also increases the cost of labor for businesses. Small businesses in particular would have to find ways to continue serving their customers with ever-increasing financial burdens put upon them by the government. One of the hypocrisies of this measure is that the minimum wage and paid sick time requirements would not apply to workers in unions. So if you’re not a union member, tough luck! And if you’re a union boss, what a deal! More government is not the solution to income inequality. Please VOTE NO on this hypocritical ballot measure that will hurt those it intends to help. ” —Tom Jenney and Boaz Witbeck, Americans for Prosperity “ ARGUMENT AGAINST PROPOSITION 206 In high school I worked at a car wash, a gas station, a Dairy Queen and a tool warehouse. While in college I worked at a home improvement center and a car dealership. Upon college graduation, which occurred during a recession, I worked a minimum wage job at a mall clothing store until a better career opportunity opened up. Basically, I survived high school, college and immediately after college on jobs that paid at or close to minimum wage. Those jobs not only put bread on my table: they taught me how to work hard, deal with customers, and understand how tough it is for businesses to survive and thrive. That's why I am very strongly against Proposition 206 and its efforts to use government to force employers to pay workers a $12 minimum wage. By raising the wage above what employers can pay, this proposition will throw young people and other low-skilled workers out of work. Many of them will be replaced by machines. It's not fair for those of us who have climbed up the work ladder into successful careers to pull up the ladder behind us. Because of the terrible recession we have just gone through, too many young people are already sitting on couches in their parents' living rooms, instead of getting onthe-job training and moving ahead in life. Proposition 206 is also unfair in another way. The proposition was put on the ballot by the union bosses. The union bosses created a special carve-out for themselves: the new law will not require paid sick time or mandate a minimum wage for union workers. So, while low-skilled workers and young people are thrown out of work, the union bosses will be collecting bigger dues from their members. ” —Marcus Huey, Phoenix “ ARGUMENT AGAINST PROPOSITION 206 WARNING: UNIONS EXEMPT THEMSELVES TO LINE THEIR POCKETS Proposition 206 calls itself the "Fair Wages and Healthy Families Act." It's false advertising. FOLLOW THE MONEY. You'll see the proposition has been funded by Big Labor organizations and their union bosses. You will also notice that the minimum wage and paid sick time requirements in the proposition WOULD NOT APPLY TO UNION WORKERS! That's interesting, isn't it? Why would the union bosses exclude union workers from the requirements? The answer is simple economics. By using the government to force employers to raise wages at the bottom end, the higher minimum wage would cause struggling small businesses to lay off workers. The people who would get hurt worst by the lay-offs would be low-skilled workers, especially young people who are trying to build job skills. That's bad news for low-skilled workers. (What's "fair" about losing your job?) But it's great for labor bosses looking to swell their membership rolls. Currently there is little to no benefit for private sector workers to join unions, which is why union membership is at an alltime low. So the new tactic being deployed under Proposition 206 is to force companies to become union shops. How? Under Proposition 206, if a business agrees to be unionized, it would not have to pay the minimum wage or comply with the paid sick time requirements. They will be exempt, just like the unions. That may not be good for the actual worker. But guess who will collect more union dues out of union worker paychecks? You guessed it: the union bosses! Please read the fine print. And please vote NO on Proposition 206! ” —Becky Fenger, Phoenix “ When it comes to public policy, we must use the basic principles of economics to avoid doing harm as we try to solve social problems such as poverty. Unfortunately, the efforts of Proposition 206 to establish “fair wages” go against the basic principles of economics, and will do more harm than good. Basic microeconomic theory and decades of empirical economic research show that a government-imposed minimum wage above market wages will cause people to become unemployed. Further, the people who get hurt most by minimum wage increases are workingclass individuals, minorities, and young people without college degrees. There’s nothing “fair” about a government policy that will make more people unemployed. In addition to unemployment, an artificially high minimum wage established by government will cause consumers (like you and me) to pay more for goods and services. Likewise, businesses will have to find ways to bear the higher costs caused by government-enforced wage restrictions that distort the market. In cities that have already implemented higher minimum wage laws, we are seeing many businesses laying off employees and replacing their labor with technology. For example, instead of placing restaurant orders with human beings, customers will end up placing their orders via an automated system (such as a tableside computer tablet). The negative economic effects of a minimum wage increase would be too high for Arizonans. We should not harm people while pretending to help them. Please vote NO on this ballot measure and avoid harming low-skilled workers, consumers and small businesses in Arizona ” —Jeffrey Singer, Phoenix “ Before retiring, I worked for decades as an investment manager with various pension funds, and dealt first hand with policy issues involving pensions, wages and benefit packages. This experience leads me to urge everyone to vote against Proposition 206. Many workplace regulations look good from afar, but don’t work out in the real world. Why not force employers to pay all workers a minimum wage of $12 an hour, plus mandatory sick leave benefits? One answer is that the Law of Unintended Consequences always seems to intervene. Ham-handed government actions have a way of creating newer and bigger problems. Small businesses create the most jobs. Most small businesses operate on tight margins and many are struggling to meet payroll and cover other costs, like rent, insurance, taxes, etc. If a struggling business has 10 employees, and pays each of them $11 an hour, that's $110 an hour. At 40 hours a week, that's $4,400 for the weekly payroll. If the government forces the business to pay $12 an hour, that's $120 an hour, or $4,800 for the weekly payroll. That equals $400 per week, and $20,800 per year in added costs. What if a business cannot afford this extra expense? The easiest solution may be to fire one of the employees. That employee will now get $0 an hour, and will lose his or her private health insurance plan. Or, the business may decide to cut several employees' hours to part-time, which may cause them to lose their private health insurance. Raising the minimum wage is a classic case of the road to Hell being paved with good intentions. Please vote No on Proposition 206. ” —William O. Sumner, Phoenix

Campaign finance

See also: Ballot measure campaign finance, 2016 and Campaign finance requirements for Arizona ballot measures

Total campaign contributions:
Support:	$4,358,473.97
Opposition:	$46,676.80

Two campaign committees were registered in support of Proposition 206. One was registered in opposition to Proposition 206. The contribution and expenditure totals below were current as of January 16, 2017.

Support

PAC	Amount raised	Amount spent
Arizonans for Fair Wages and Healthy Families	$4,319,318.97	$4,148,706.92
CASE Action for Fair Wages and Working Conditions	$39,155.00	$43,488.09
Total	$4,358,473.97	$4,192,195.01

The following were the top five donors who contributed to the Arizonians for Fair Wages and Healthy Families committee as of January 16, 2017:

Donor	Amount
Living United for Change in Arizona	$1,912,684.00
The Fairness Project	$759,425.78
CPD Action	$500,000.00
National Education Association	$350,000.00
Civic Participation Action Fund	$350,000.00

Opposition

PAC	Amount raised	Amount spent
No on Prop 206	$46,676.80	$28,212.48
Total	$46,676.80	$28,212.48

The following were the top donors who contributed to the No on Prop 206 committee as of January 16, 2017:

Donor	Amount
Arizona Chamber of Commerce and Industry	$30,036.78
Americans for Prosperity	$7,640.02
Walter Brent Kyte	$5,000.00
National Federation of Independent Business	$4,000.00

Media editorials

Support

• Arizona Daily Sun said: "So to those who contend the government shouldn’t be meddling in the private labor market, we can only say that debate is long over."
• Tucson Weekly said: "We doubt that raising the minimum wage is going solve all our economic problems, but—as with the recreational marijuana initiative—it's a safe bet that state lawmakers are not going to make the effort to raise the minimum wage themselves. (Far too many of our Republican lawmakers don't believe in a minimum wage, period.) In fact, in this last session, lawmakers made it impossible for cities and towns to increase minimum wages in their own jurisdictions. That's rotten politics and it's time to send them a message: Stop preempting local authority or the voters will override you."

Opposition

• The Arizona Republic said: "The notion that a large population is somehow locked into bottom wages is a misleading one. Indeed, one of the enduring built-in features of our free-market system is that wages are based on skills and workforce pool. They are not arbitrarily set. That all workers should earn a living wage is an admirable concept. But it is not one that can simply be willed into reality. It certainly should not be slapped on as a mandate. Vote no on Prop. 206."

Polls

See also: Polls, 2016 ballot measures

• Between August 17 and August 31, 2016, The Arizona Republic, in cooperation with Morrison and Cronkite News, found that 61 percent of those surveyed support Proposition 206. While the newspaper found support across all demographic groups, support was highest amongst Democrats, voters ages 18 to 35 and people with a high-school diploma or less.
• OH Predictive Insights released a poll on October 10, 2016, showing 53 percent of respondents supporting and 40 percent opposing Proposition 206.
• In mid-October 2016, HighGround Public Affairs surveyed 400 likely voters and found support for the initiative to be 54.3 percent amongst respondents.

Arizona Proposition 206
Poll	Support	Oppose	Undecided	Margin of error	Sample size
HighGround Public Affairs 10/14/2016	54.3%	38.8%	6.9%	+/-4.88	400
OH Predictive Insights 9/28/2016 - 9/30/2016	53.0%	40.0%	7.0%	+/-3.66	718
The Arizona Republic, Morrison, and Cronkite News 8/17/2016 - 8/31/2016	61.0%	31.0%	8.0%	+/-3.4	784
AVERAGES	56.1%	36.6%	7.3%	+/-3.98	634
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Background

The minimum wage debate is as old as the United States Department of Labor, an institution established in 1913. The minimum wage was once debated as an issue of constitutionality. The United States Supreme Court ruled the minimum wage unconstitutional in 1923's Adkins v. Children's Hospital, but later reversed course in their West Coast Hotel v. Parrish decision in 1937.

Minimum wage in Arizona

Voting on Minimum Wage
Ballot Measures
By state
By year
Not on ballot
Local Labor and unions Local wages and pay

See also: Arizona Minimum Wage, Proposition 202 (2006)

Prior to the passage of Proposition 202 in 2006, Arizona's minimum wage was equivalent to the federal government's minimum wage. Over 65 percent of voters approved Proposition 202, which increased the state's minimum wage to $6.75 per hour. Starting in 2007, the minimum wage was adjusted in relation to increases in the cost of living.

In 2009, the federal government increased the minimum wage to $7.25 per hour. As of January 1, 2015, Arizona's minimum wage was $8.05 per hour. The cost-of-living in Arizona did not increase between 2015 and 2016. Therefore, the 2015-level minimum wage was maintained into 2016. Without Proposition 206, the minimum wage was expected to increase to $8.15 in 2017.

Flagstaff Proposition 414

Voters in Flagstaff, Arizona, voted on an additional minimum wage initiative, titled Proposition 414, in 2016. Proposition 414 was designed to increase the minimum wage within the city's boundaries to $15 an hour in 2021 and, thereafter, index the minimum wage to increases in cost-of-living. The measure was approved.

Flagstaff Needs a Raise led the campaign in support of Proposition 414. The group collected more than 3,300 valid signatures to get the initiative on the ballot. Local Flagstaff initiatives required 2,537 signatures in 2016.

Councilmember Eva Putzova, a supporter of the initiative, argued, “Flagstaff’s unemployment rate hovers under 5 percent, yet our poverty rate is about 25 percent overall and 28 percent among children. … Increasing the minimum wage will not only put more dollars into our families’ pockets, but also positively impact other outcomes that are linked to poverty, including community health, educational attainment, domestic violence, and crime.” Stuart W. McDaniel of the Greater Flagstaff Chamber of Commerce criticized the measure, stating, “When minimum wage levels are set without regard to productivity, those without corresponding skill sets would be priced out of jobs. There is nothing compassionate about reducing the chances of someone getting a job. Simply put, minimum wage laws have unintended negative consequences.”

2016 minimum wages

Below is a chart detailing the minimum wage in all 50 states, plus the District of Columbia, in 2016. Washington, D.C., had the highest minimum wage at $10.10 per hour. Georgia and Wyoming both had state minimum wages at $5.15 per hour, which was below the federal minimum wage.

Click "Show" in the State column to expand.

State	2016 minimum wage	Rank
Alabama	$7.25	31
Alaska	$9.75	4
Arizona	$8.05	24
Arkansas	$8.00	27
California	$10.00	2
Colorado	$8.31	18
Connecticut	$9.60	5
Delaware	$8.25	19
Florida	$8.05	24
Georgia	$5.15	50
Hawaii	$8.50	15
Idaho	$7.25	31
Illinois	$8.25	19
Indiana	$7.25	31
Iowa	$7.25	31
Kansas	$7.25	31
Kentucky	$7.25	31
Louisiana	$7.25	31
Maine	$7.50	29
Maryland	$8.25	21
Massachusetts	$10.00	2
Michigan	$8.50	15
Minnesota	$9.00	10
Mississippi	$7.25	31
Missouri	$7.65	28
Montana	$8.05	24
Nebraska	$9.00	10
Nevada	$8.25	21
New Hampshire	$7.25	31
New Jersey	$8.38	17
New Mexico	$7.50	29
New York	$9.00	10
North Carolina	$7.25	31
North Dakota	$7.25	31
Ohio	$8.10	23
Oklahoma	$7.25	31
Oregon	$9.25	9
Pennsylvania	$7.25	31
Rhode Island	$9.60	5
South Carolina	$7.25	31
South Dakota	$8.55	14
Tennessee	$7.25	31
Texas	$7.25	31
Utah	$7.25	31
Vermont	$9.60	5
Virginia	$7.25	31
Washington	$9.47	8
Washington, D.C.	$10.50	1
West Virginia	$8.75	13
Wisconsin	$7.25	31
Wyoming	$5.15	50

This map was current as of December 31, 2016.

Impact on presidential election

See also: Presidential election in Arizona, 2016

In 2004, President George W. Bush was re-elected during an election that featured a wave of initiatives and referrals banning same-sex marriage. The New Republic, citing academic research, suggested that one such measure, Ohio Amendment 1, played a role in invigorating social conservatives and, in turn, aiding the incumbent Republican in securing a second term. With polls showing a tight race in Arizona, some pundits and activists thought ballot initiatives could help turn the state blue in 2016. Arizona Proposition 206 and Proposition 205, which would legalize marijuana, could have helped Democratic candidate Hillary Clinton gain traction in the historically Republican state.

Politico, NBC News, and Mother Jones all suggested that minimum wage measures, such as Proposition 206, could have increased voter turnout among young people and racial minorities, boosting the prospects of Clinton. Patty Kupfer, the campaign manager of Colorado Families for a Fair Wage, thinks this was a possibility. She said, “This is going to be a driver for Democratic base voters, especially for low-income voters and communities of color.” Geoffrey Skelley, a spokesman for the University of Virginia Center for Politics, stated that he expected progressive initiatives to increase Democratic turnout, but only marginally. He argued, "This stuff is very much on the margins, and it might help a little bit, but the presidential race is the main driver of turnout. It's tough to say that these things are going to make much of a difference in the end. But I guess it can't hurt to try."

Fiscal analysis statement

See also: Fiscal impact statement

The Joint Legislative Budget Committee of the Arizona Legislature was required to file a fiscal analysis statement statement for Proposition 206. In 2006, Arizonans approved Proposition 202. This measure increased the minimum wage from $5.15 per hour to $6.75 per hour and thereafter adjusted the minimum wage for changes in the cost of living. The Joint Legislative Budget Committee estimates that the minimum wage would have been $8.20 per hour in 2020, assuming an inflation rate of 2.68 percent. This would have been $3.20 less than what the minimum wage will be under Proposition 206. Table 1 details the discrepancies between Proposition 206 and the prior law.

According to the Arizona Department of Administration, 706,845 workers earned a wage of $12.00 or less during 2015.

The committee warned that increasing the minimum wage could increase labor costs for employers, who would pass on costs as price increases to consumers or decrease employment. However, the committee also noted that research on how minimum wage increases impact employment often contradict. Therefore, "the impact that Proposition 206’s minimum wage increases would have on employment in Arizona is highly uncertain."

An increased minimum wage could decrease government expenditures on welfare. Requiring contractors to increase their employees wages, however, could increase government expenditures in some instances.

The committee noted that there is much less academic research and data on the effects of requiring paid sick leave.

Reports and analyses

Grand Canyon Institute

The Grand Canyon Institute (GCI), a self-described nonpartisan and centrist research center, determined Proposition 206 would increase wages for an estimated 790,000 workers or about 30 percent of Arizona's workforce. Dave Wells of the GCI said, "A higher minimum wage isn’t just for teenagers nor is it just for very low income households. Two-thirds of beneficiaries would be older than 24 years old and most would be women. Forty percent of working single mothers would likely benefit."

The report also stated that consumers could expect price increases of 0.5 percent to 1.6 percent for most items and up to six percent for restaurant items. The GCI presented different job-loss scenarios, with the middle-ground scenario showing 13,000 jobs lost under a $12 minimum wage.

Path to the ballot

See also: Laws governing the initiative process in Arizona

Initiative proponents needed to collect 150,642 signatures by July 7, 2016, to land the measure on the ballot.

Thomas Robles, deputy chairman for the Fair Wages and Healthy Families campaign, said that, as of May 24, 2016, they had collected nearly 90,000 signatures. Arizona Healthy Working Families reported on July 7, 2016, that they submitted 275,000 signatures to the Arizona secretary of state's office.

The Arizona Secretary of State announced on August 19, 2016, that enough of the submitted signatures were valid to qualify Proposition 206 for the ballot.

Cost of signature collection:
Sponsors of the measure hired Sign Here Petitions to collect signatures for the petition to qualify this measure for the ballot. A total of $900,981.80 was spent to collect the 150,642 valid signatures required to put this measure before voters, resulting in a total cost per required signature (CPRS) of $5.98.

Lawsuits

Lawsuits overview
First lawsuit
Issue: Signature validity; petition circulators were not legally qualified
Court: Maricopa County Superior Court
Ruling: The litigation was filed too late.
Plaintiff(s): Arizona Restaurant Association	Defendant(s): Arizonans for Fair Wages and Healthy Families
Plaintiff argument: Some petition circulators were not legally qualified.	Defendant argument: The litigation was filed too late.
Second lawsuit
Issue: Violation of contract; signature gathering company was allegedly not paid in full for services.
Court: Maricopa County Superior Court
Ruling:
Plaintiff(s): Sign Here Petitions	Defendant(s): Arizonans for Fair Wages and Healthy Families
Plaintiff arguments: Sign Here Petitions is owed $65,000, as per the contract with supporting campaign.	Defendant arguments: Contract required payment for valid signatures. Around 25 percent of signatures were discarded, but the campaign still paid for 90 percent of them.

  Sources: Arizona Daily Star and The Arizona Republic

Arizona Restaurant Association

On July 15, 2016, the Arizona Restaurant Association filed a lawsuit in Maricopa County Superior Court, questioning whether the individuals circulating signature petitions were legally qualified. The lawsuit also claimed that there were flaws in the affidavits that circulators were required to sign.

The suit sought a temporary restraining order to prevent signature validation by the secretary of state's office. On July 19, 2016, the Maricopa County Superior Court denied the request for a restraining order.

On August 11, 2016, a Maricopa County judge ruled that dozens of signature collectors for Proposition 206 were not qualified. Judge Joshua Rogers approved the measure on August 19, 2016, on a technicality that the lawsuit was filed too late. Later on the same day, the Arizona Secretary of State announced that the measure had qualified for the ballot.

The Arizona Restaurant Association appealed to the Arizona Supreme Court in an attempt to overrule Rogers' findings and remove Proposition 206 from the ballot. The supreme court rejected the challenge.

Sign Here Petitions

Sign Here Petitions, the firm Arizonans for Fair Wages and Healthy Families (AFWHF) hired to collect signatures, filed litigation in Maricopa County Superior Court against the supporting campaign on September 23, 2016. Paul Welch, an attorney representing Sign Here Petitions, claimed AFWHF owed the firm at least $65,000.

Bill Scheel, campaign manager of AFWHF, argued that their contract with Sign Here Petitions was for valid signatures. The firm, according to Scheel, did not "properly screen and register the circulators, so tens of thousands of signatures were disqualified and very nearly prevented Arizona voters from being able to decide on this important measure." About 25 percent of signatures were rejected by the Arizona Secretary of State. Scheel said his campaign paid Sign Here Petitions $900,000 or about 93 percent of the contract. The contract was $965,000.

Bonita Burks, owner of Sign Here Petitions, responded, “I'm standing firm: You owe the money, you need to pay it.”

Related measures

Minimum wage measures on the ballot in 2016
State	Measures
South Dakota	South Dakota Decreased Youth Minimum Wage Veto Referendum, Referred Law 20 d
Washington	Washington Minimum Wage Increase, Initiative 1433 a
Colorado	Colorado $12 Minimum Wage, Amendment 70 a

Recent news

The link below is to the most recent stories in a Google news search for the terms Arizona Minimum Wage Initiative. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Arizona Minimum Wage and Paid Time Off, Proposition 206 (2016) - Google News

See also

Suggest a link

• 2016 ballot measures
• Arizona 2016 ballot measures
• Laws governing the initiative process in Arizona

External links

• Initiative Petition for Proposition 206
• Arizona 2016 Ballot Measures

Support

• Arizonans for Fair Wages and Healthy Families
• Arizonans for Fair Wages and Healthy Families Facebook
• Arizonans for Fair Wages and Healthy Families Twitter

Opposition

• Protect Arizona Jobs
• Protect Arizona Jobs Facebook
• Protect Arizona Jobs Twitter