Arizona’s minimum wage has been approved, now what?
PHOENIX — Businesses have to adjust now that Arizona will have a new minimum wage.
“Businesses large and small are going to have to figure out how they’re going to handle this spike in labor costs,” said Garrick Taylor with the Arizona Chamber Of Commerce & Industry. “And that could mean in some cases cutting employees hours, [and] in many cases raising prices.”
Voters passed Prop. 206 on Tuesday, which raises the state’s minimum wage.
“If you’re a business, you need to take that spreadsheet with your labor costs and crumple it up,” he said. “Throw it away and start from scratch because you’re about to get hit with a hike starting in January 2017.”
Arizona’s minimum wage will rise from $8.05 to $12 per hour by 2020, and require employers to pay sick time to employees. The base wage will rise to $10 an hour next year, then increase every year until 2020.
“You’re going to think about a few things,” he said. “Can you afford to hire new entry level workers? How will you afford the workers that you already have? Will you have to cut their hours?”
“What are we pricing our products at? Will we have to raise prices?” he continued. “And if we do, will consumers accept that price hike?”
Taylor says businesses should pull out that clean labor-cost spread sheet and search for answers to these questions.
“These are the type of decisions that businesses large and small, but especially small, are going to have to figure out come January, these are tough ones.”
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