Proposition 206 attempts to raise the minimum wage to $12 by 2020

Proposition 206 will be hitting the Arizona ballot in November and the outcome will determine whether or not the minimum wage in Arizona will remain at $8.05 or increase by nearly 50 percent to $12 by 2020. The proposition, if passed, will also call for small business employees to receive 24-hour mandated paid sick leave annually, or 40 hours for large business employees.

Allison Childress, president of UA Young Democrats, said that if the proposition is not passed, it will probably be because there is a fear that raising the minimum wage would drive businesses away from Arizona or that small businesses would be hurt.

“This directly impacts all students that are working, basically,” Childress said. “I made slightly more than minimum wage at jobs that I’ve held and it’s not always quite enough to cover the cost of living—even for a student.”

Sebastian Laguna, president of UA College Republicans, preferred not to comment on this issue.

Lea Márquez Peterson is the president and CEO of the Tucson Hispanic Chamber of Commerce and is now also the chair of the “Vote No on Prop 206: Protect Arizona Jobs” campaign.

Márquez Peterson said she decided to chair this campaign because she is a former small business owner of gas stations and convenience stores. This background made her very passionate about discouraging what she believes would be the negative impacts of Proposition 206.

She said the increase in minimum wage is “too much, too soon” after the recession. Once Márquez Peterson and her colleagues found out Proposition 206 would be on the November ballot, they immediately surveyed small businesses in the Tucson area.

“Many of them said they would likely cut hours for employees, they’d be less likely to hire high school or college-aged people … they might not grow or expand like they had planned to and ultimately, they may raise the prices of their goods and services to cover the cost,” Márquez Peterson said.

In contrast, Tomas Robles, deputy chairman for the Arizonans for Fair Wages and Healthy Families campaign: “Yes on 206: Healthy Working Families.”

“For too long, Arizonans don’t make enough money to make ends meet,” Robles said. “And the sick leave initiative is great because no family should ever have to choose between their job and taking care of themselves or their loved ones.”

Robles said that of the roughly 250 small businesses in Tucson, “a good number” of them have already publicly endorsed the, “Yes on 206” campaign.

“What we’re learning is that many small businesses already pay these wages and already provide certain days of sick leave,” Robles said.

Robles and members of his campaign believe that by making the raise in the minimum wage a requirement for everyone, they can “level the playing field,” and help small businesses become more competitive to larger corporations.

In regard to the argument that Proposition 206 will encourage businesses to turn to more automation and less manual labor by employees, Robles said, “If they could do it, they would have done it by now.”

“At the end of the day, you’re going to need workers, especially in service industries,” Robles said. “No one’s going to talk to a robot if they need some clothes or something else.”

George Hammond is the Economic and Research Center director for the Eller College of Management and a professor in macroeconomics and economic forecasting.

“Academic research suggests that when you increase the minimum wage, that can have a negative impact on employment, particularly for teens and young adults,” Hammond said.

Hammond said that the incremental increases in minimum wage that have happened so far have had only small decreases in teen and young adult employment, but the concern with Proposition 206 is that there has not been as much research about how unemployment will be affected for this large of a spike in the minimum wage.

Hammond said that there are other tools available to the government that would have a more direct impact on raising incomes. One of these is the earned income tax credit, which offers a lower effective tax rate to low-income families.

“A lot of economists think that’s a more effective tool to alleviate poverty,” Hammond said.

The argument against using earned income tax credit instead of the raise in minimum wage is that people typically file their tax returns the year after they’ve earned the wages. So raising the minimum wage in November is supporting the argument that people “need a higher income, now,” according to Hammond.

Hammond encourages students to look at the Making Action Possible for Southern Arizona website, which was developed by the Eller Economic and Research Center to show objective economic information, forecasts and analysis. Anyone can use these websites to track how Southern Arizona’s business growth, employment growth and other areas of the economy are doing in comparison to 11 other western metropolitan regions.

Proposition 206 will be on the Nov. 8 ballot along with Proposition 205.

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