PHOENIX -- Using the soft economy as a lever, House Republicans voted Monday to ask voters to repeal the state's minimum wage.
House Majority Leader Steve Court acknowledged that the original measure was approved six years ago on a nearly 2-1 margin. That law requires the Industrial Commission to consider inflation and make annual adjustments in the minimum that companies doing business here can pay their workers.
The result is a current minimum wage of $7.65 an hour, 40 cents more than required under federal law.
Court said, though, the economy in 2006 was quite different than it is now. And he said that employers cannot afford the extra costs.
But Rep. Ruben Gallego, D-Phoenix, said the depressed economy is precisely the reason having a state minimum wage higher than what is required under federal law -- and one that keeps pace with inflation.
"Right now there are so many people working minimum wage jobs that normally would not be working minimum wage jobs," he said. In fact, Gallego argued, many people have to work two minimum wage jobs just to make what they used to earn, before the economy tanked and companies laid off workers.
He said the inflation indexing is necessary "just to allow them to catch up with the rising cost of everyday rising food and fuel."
There is no indexing of the federal minimum wage, with changes possible only with congressional approval. And the U.S. Department of Labor said the last time that happened was in 2009.
Court acknowledged the intent of voters in 2006 was to ensure that those at the bottom of the pay scale do not fall farther behind due to inflation.
"I think in normal times that might not be so bad," the Mesa Republican said. "But in a down economy like we have, we've continued to ratchet up our minimum wage while the federal government has kept theirs flat."
The result, he said, is Arizona employers have to pay their minimum wage workers 5 percent more than companies in surrounding states.
"It's a competitive issue with other states," Court said.
He acknowledged that a large number of these workers are probably in food service and hospitality jobs which cannot be exported elsewhere.
"But still, they're having to give raises to employees at a time when their business is down and hurting them," Court continued. "So we just wanted to have the voters look at it again."
Rebecca Friend, executive director of the state AFL-CIO, which championed the initiative, said businesses made the same arguments in 2006 with claims that it will unduly harm Arizona businesses. She said that, six years later, no one has been able to present concrete evidence that Arizona having its own minimum wage has hurt the economy.
"Wall Street crushed the economy, not the minimum wage," she said.
Friend said if the issue reaches the ballot in November -- the measure still needs Senate approval -- supporters will once again remind voters that, even with indexing, what Arizona requires is not exactly making anyone rich.
"The minimum wage is not a living wage," she said, saying the indexing is "the one thing that makes some attempt to deal with the issue of inflation or changes in the economic situation."
As approved, HCR2056 would set the state minimum wage permanently at $7.65 an hour -- where it is now -- or the federal minimum wage, whichever is higher. With no indexing, that would mean the state minimum wage would become the federal minimum wage whenever Congress got around to approving an increase to that level or higher.
That effectively would return the law to the way it was before the 2006 initiative when federal law allowed workers to be paid as little as $5.15 an hour. The initiative boosted that immediately to $6.75, with a requirement for annual inflation adjustments.
The most recent adjustment, which took effect in January, added 30 cents an hour to the wage after the Industrial Commission, charged with monitoring the wage, pegged inflation at 3.8 percent. While that translated out to 27.9 cents, the law requires the number to be rounded to the nearest nickel.
The commission does not track how many Arizonans are working at the minimum wage.
The law does allow a employers to claim a $3 an hour "tip credit," meaning they will be able to put just $4.65 an hour into paychecks. But that requires proof that the employees are, in fact, bringing in at least $3 an hour in tips.