The Arizona State AFL-CIO and the National Employment Law Project hailed the upcoming increases as an essential move to help working families that face stagnant wages and rising prices, increase consumer spending at local businesses, and promote the kind of good jobs that will be critical to the nation’s economic recovery.
“Wages are falling as a result of staggering unemployment, slow job creation, and declining unionization,”
Eighteen states plus the District of Columbia have minimum wage rates above the federal level of $7.25 per hour – or just over $15,000 per year for a full-time minimum wage earner. Unlike the federal rate – which loses value every year it is not increased by an act of Congress - 10 states increase their minimum wage rates annually to ensure that the lowest-paid workers don’t lose ground: Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Washington. Legislation to raise the minimum wage and add an annual cost of living adjustment was advanced in several states this year including California, Massachusetts, Maryland and Illinois. Additional states are considering such proposals for next year.
While weak consumer demand is slowing business expansion, raising the minimum wage puts a little more money in the pockets of low-wage workers who have little choice but to spend that money immediately on goods and services. “The lack of consumer demand has dramatically slowed job creation. Making matters worse, Congress is unwilling to allow the federal government to prime the demand. The only bright spot in the economy is the rise of state minimum wages that have been indexed to inflation, allowing our lowest paid workers to better meet their needs while increasing overall consumer demand,” said Rebekah Friend, Executive Director and Secretary-Treasurer of the Arizona AFL-CIO.
Strengthening the buying power of low-wage workers is especially critical in the current economic climate. A recent NELP study finds that the majority of new jobs created in the wake of the recession are in low- and mid-wage industries. And while the bastion of low-paid workers is growing, the wages for this group are declining: workers in lower-wage occupations (with median wages under $13.52) have seen a 2.3 percent decline in real wages since the recession began.
A large body of research shows that raising the minimum wage is an effective way to boost the incomes of low-paid workers without reducing employment. A groundbreaking 1994 study by David Card and Alan Krueger, President Obama's nominee to head the Council of Economic Advisers, found an increase in New Jersey’s minimum wage did not reduce employment among fast-food restaurants. These findings have been confirmed by 15 years of economic research, including a 2010 study published in the Review of Economics and Statistics that analyzed data from more than 500 counties and found that minimum wage increases did not cost jobs. Another recent study published in April 2011 in the journal Industrial Relations found that even during times of high unemployment, minimum wage increases did not lead to job loss.
According to the Bureau of Labor Statistics, three quarters of minimum wage earners nationwide are 20 years or older, and more than 60 percent are women. Most minimum wage earners are adults, and many of them support families.
The successful 2006 ballot initiative campaign that raised the minimum wage and provided an annual cost of living adjustment was supported by a broad coalition of Arizona labor, civic, community, and religious organizations. Chaired by Rebekah Friend, Executive Director of the Arizona AFL-CIO, the coalition canvassed the state to gather over 200,000 signatures to place Proposition 202 - the Minimum Wage Initiative - on the ballot. The measure was approved overwhelmingly, by 65% on Election Day 2006.
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The Arizona AFL-CIO (American Federation of Labor - Congress of Industrial Organizations)