How Two Arizona Business Owners Will Cope with Minimum Wage Hike

Date: December 13, 2016

‘It’s causing a lot of tension right now.’


With Arizona’s minimum wage set to rise to $10 an hour next month, businesses are already cutting staff and hiking prices.

“One thing we’ve had to do is raise our rates for our summer camp, approximately 3 to 4 percent,” said Bebe Brown May of Friendly Pines Camp in Prescott, Arizona. “And we’ve reduced staff for the coming season by 12 to 14 percent.”

And it’s likely to get worse, with the minimum wage rising to $10.50 in 2018, $11 in 2019, and $12 in 2020. Starting in January, employers with fewer than 15 workers are also required to provide 24 hours of paid sick leave a year. Those with 15 or more employees must provide them 40 hours a year.

Small business owners in Flagstaff are facing an even higher burden, with the minimum wage rising to $12 an hour starting in July, then to $15 by 2021.

“It is causing a lot of tension right now,” said Charlie Odegaard of Odegaard’s Sewing Center in Flagstaff. “People are realizing what’s going to happen now that they’ve voted.”

A group called Elevate Flagstaff is already seeking to have voters revisit the minimum wage increase via a May 2017 ballot question.

Odegaard said $10 an hour won’t affect his business because he already pays his workers that—but higher wages would.

“As far as $12, we’ll have to sit down and figure out the amount of labor we’ll need to have,” he said. “In retail there’s two options: to raise prices or cut back services, and in our business, it’s hard to cut back services.”

For other small business owners, paid sick leave will be the big burden.

“I heard from a fast food person the minimum wage isn’t bothering him too much. What scared him was the paid sick leave,” said Odegaard. “He was going to start cutting back his employees’ hours, and he said he will not have anyone be a full-time employee.”

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