What is the current minimum wage in Flagstaff?
The current minimum wage in Flagstaff and the rest of Arizona is $8.05 per hour.
What is the difference between minimum wage and living wage?
At its height in 1968, federal minimum wage was 53 percent of the average U.S. production worker wage. Today it is only 35 percent. If the minimum wage had been pegged to inflation since 1968 it would be $9.54 per hour. If pegged to the growth in average wages it would be $10.54 per hour. If pegged to productivity growth it would be $18 per hour. The wage floor should be high enough to lift working people from poverty, to give dignity to work, and to meet workers’ basic needs without government assistance. Cost of living varies from community to community therefore, wages should reflect local conditions.
Why are you focusing on the issue of wages in Flagstaff?
We want to make a meaningful difference in lives of a significant portion of the Flagstaff population who work in the low-wage sectors. A national media outlet called Governing has recently reported that Flagstaff private-sector workers have the lowest estimated wages adjusted for cost of living in the entire nation. It is more expensive to live in Flagstaff than it is in New York City.
What are examples of low wage occupations and how many people in Flagstaff are employed in these occupations?
According to the U.S. Bureau of Labor Statistics, the Flagstaff Metropolitan Area has more than 14,000 jobs (25% of all jobs) paying less than $10 and 22,000 jobs paying less than $15 per hour. Examples of low wage occupations include various food preparation and serving related occupations, maids and housekeepers, retail salespersons, but also substitute teachers and clerical workers.
What other cities have set their own minimum wage?
Over the past ten years many cities around the nation have done this. Some examples are Santa Fe, Albuquerque, and Las Cruces, NM; Los Angeles, San Francisco, San Jose, and Berkeley, CA; Seattle, WA; Chicago, IL; New York City, NY; Montgomery County, MD; and Washington, DC.
What effect will a higher minimum wage have on business and employment in Flagstaff?
Studies show that higher wages mean more money spent on local businesses, a reduction in poverty, and a healthier economy. It has little to no effect on employment.
How will the local economy benefit from the increased minimum wage?
The increase in the minimum wage (once fully implemented in 2021) will add almost $200 million into the local economy annually. The indirect economic impact is about $900 million. People with low wages tend to spend all their earnings rather than save.
Won’t the increase in the minimum wage lead to increase in prices?
Credible studies report that a 10 percent increase in wages results in 0.4 percent increase in prices. That means that when the minimum wage goes up from $8.05 to $15, in five years, the prices will increase by only 3%. A hamburger that today costs $10.50 will in 2021 (as a result of the increased minimum wage) cost $10.82. The effect on prices is negligible because increasing the minimum wage leads to lower employee turnover, higher productivity, and better service, so the businesses ultimately generate more revenue.
How would you respond to an argument that we should focus on attracting or expanding higher wage businesses rather than increasing the minimum wage?
Establishing a higher minimum wage and attracting higher wage businesses are not mutually exclusive efforts. As long as tourism and retail continue to be significant employment sectors in Flagstaff, people employed in related occupations will have a hard time making ends meet without raising minimum wages.
Aren’t most of the low-wage workers teenagers and college students holding their first job?
The Current Population Survey, a monthly review conducted by the Census Bureau estimates that nationally 60 percent of low wage workers (earning less than $10.10) are 25 years old or older. An increasing number of low wage workers are not just supporting themselves. In Flagstaff we have more than 1,100 housekeepers and an additional 650 hotel clerks. These workers have families and their jobs are life-long professions. A recent report by the Center for Economic and Policy Research also shows that low-wage workers are older and more of them have at least some college education—a significant shift from 1979.
Why should people who have good paying jobs care about minimum wages? In Arizona alone taxpayers subsidize low corporate wages to the tune of $4.5 billion. This is the hidden cost of poverty wages.
What is income inequality in Flagstaff?
As of 2013, Flagstaff has the highest income inequality of any city in Arizona based on the American Community Survey conducted by the Census Bureau. GINI is the primary measurement for income inequality in economics and is measured from 0-100, with 0 being perfect equality and 100 being perfect inequality.
This is 2013 data:
United States GINI: 41.1
Arizona GINI: 46.8
Flagstaff GINI: 52.8
In the United States, compared to the 381 largest metropolitan areas, Flagstaff has the 3rd highest income inequality of any US city. (Based on ACS 2013 data). If Flagstaff were a country unto itself, we would rank 14th highest in income inequality in the world, in between Brazil and Suriname (by the World Bank GINI rankings).