Implications of Two Arizona Ballot Measures on Hourly Minimum Wage

Arizona voters will have the opportunity to weigh in on two important measures regarding the state’s minimum wage in the upcoming November election. One measure, Proposition 138, was referred to the ballot by the state Legislature and aims to adjust the pay of tipped workers. The proposition would allow workers who regularly earn tips to be paid 25% less than the state mandated hourly minimum wage if their total earnings, including tips, exceed the minimum wage by at least $2 for all hours worked.

On the other hand, activists have submitted signatures for the “One Fair Wage Act,” which includes changes to the pay of tipped workers as well as the minimum wage for all workers. This initiative would raise the statewide minimum wage by $1 in January 2025 and by another $1 in January 2026. It would also phase out employers’ ability to pay tipped workers less than the minimum wage before accounting for tips.

The Arizona Chamber of Commerce & Industry is endorsing Proposition 138, citing concerns about the potential negative impact of the One Fair Wage Act. According to Courtney Coolidge, the vice president of government affairs for the Chamber, the Act could result in job losses and higher prices for consumers. Coolidge pointed to the experience in Washington, D.C., where a similar measure led to job cuts and increased dining prices.

Supporters of Proposition 138 argue that the measure is beneficial for small businesses, particularly in the hospitality and service industries. By allowing employers to count tips as part of the wage calculation, the proposition aims to help businesses manage labor costs effectively and promote job retention and growth.

As the November election approaches, Arizona voters will have to consider the implications of these two measures on the state’s minimum wage and the impact they could have on workers and businesses alike.