The Oct. 15 article in the Arizona Daily Star regarding Proposition 206 attempted to paint a picture that if the measure passes on Nov. 8, the impact of a 25 percent increase in the minimum wage next January would be minimal and would only add about 30 cents to a $5 burger order.
We have had a restaurant here for over 30 years, and the impact this would have on our operation next year would be anything but minimal.
We have about 30 mostly part-time employees. Only about two or three of our employees at any point in time are paid the minimum wage. Generally we pay that rate only to high school students on their first job.
In 2015 our payroll costs increased 10 percent and in 2016 will go up about 12 percent from the previous year. Most of this increase is due to a tightening of the local labor market. We have no objection to these increases. Itβs a matter of supply and demand, and itβs the way our system should work
The mandated $2-an-hour increase that would become effective Jan. 1 would have a devastating effect on us. At a very minimum, we would have to increase every employeeβs wage rate $2. Just this increase would increase our payroll costs 20 percent in 2017. In addition, related payroll taxes, workersβ compensation insurance and a sick-pay provision included in Prop. 206 would result in total payroll costs increasing 25 percent next year.
In the past we have increased menu prices by about 2 to 3 percent annually and in some years had no increase.
Next year, just to cover the increased payroll costs, we will have to increase the price of items on our menu a minimum of 8.5 percent.
In order to cover the cost increases of other expenses like rent, insurance, maintenance, etc., we will have to have at least a 10 percent increase in total. That is an increase three times higher than we have ever had. It would be more of the same through 2020 as the minimum-wage rate mandate increases to $12 an hour.
This proposition should not even be on the ballot. A significant number of signatures to put the measure on the ballot were ruled invalid by the Superior Court judge handling the case, but he and the Arizona Supreme Court ruled based on the βletter of the lawβ rather than on common sense. The hapless Arizona Restaurant Association had filed its lawsuit challenging the petitions two days too late.
Propositions like 206 allow workers to set their own wage rates. These mandated increases are detrimental to the vast majority of small businesses in Arizona whose success or failure has a significant impact on our stateβs economy. Small businesses and workers in the labor force would be best served by having minimum wage rates set by state and local governments.
We would hope that voters on Nov. 8 will view Prop. 206 as something that sounds good but has heavy costs both to small business and the workers of Arizona and will vote βnoβ to defeat this flawed measure.
