Phoenix Business Owners Offer Different Takes On Minimum Wage Hike

Published: Monday, October 31, 2016 - 8:08am
Updated: Tuesday, November 1, 2016 - 10:56am
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(Photo by Christina Estes – KJZZ)
An employee at Changing Hands Bookstore in Tempe.
(Photo courtesy of Fat Freddy's)
A catering spread from Phoenix-based Fat Freddy's.

Arizona’s minimum wage is 80 cents higher than the wage required by the federal government, but some say it’s not enough. If voters approve Proposition 206, the state’s minimum wage would gradually increase to $12 dollars an hour ($9 an hour for tipped workers) by 2020.

Two Employers, Two Perspectives

The tagline for Fat Freddy’s Catering is “Never Trust a Skinny Cook." The owner’s tagline for Prop 206 might be “Never trust a regulation.”

“It’s another layer of government,” said Freddy Renstrom, owner of Fat Freddy's Catering. “That’s the way I look at it.”

Renstrom said the lowest starting salary at his Phoenix-based catering business is $9.50 an hour, nearly $1.50 more than the state’s current minimum wage.

“In my company they have the ability to make more. They have the ability to do better and I’d rather people have that and not just walk in the door, ‘I get this much money, another year I get this much money, another year I get that money,” he explained. “I don’t like somebody telling me what to do.”

"Right and I don’t want speed limits on our freeways because I don’t want anyone telling me how fast I can drive,” said Bob Sommer, co-founder of Changing Hands Bookstore in Tempe and Phoenix.

Like Renstrom, Sommer starts his employees above the minimum wage. But unlike Renstrom, Sommer supports Prop 206 also called the Healthy Working Families Initiative.

“Over the years, as we’ve increased minimum wages and increased benefits for our employees, we found ways of increasing our sales or decreasing other expenses,” he said.

Because publishers set book prices, Sommer said they can’t raise them, but if Prop 206 passes, most consumers will pay more.

“You think corporate America is just going to sit back and go, ‘Oh, we’re just going to eat these wage increase?’ They’re not going to do that,” Sommer said.

Opponents have said Prop 206 might force some companies to cut back on hiring or even go out of business. But, Sommer said that argument was debunked in 2007 after voters approved a smoking ban that included restaurants and bars.

“All the bars are still there and more are opening every day,” he said.

Grand Canyon Institute Study

A study released this month by the non-partisan Grand Canyon Institute finds a $12 dollar minimum wage would give raises to 790,000 Arizonans.

It also said it would cost 13,000 jobs and result in price increases between 0.5 percent and 1.6 percent with the exception of fast food chains, which would “likely raise prices by 6 percent."

The policy paper also cites a Congressional Budget Office study that found the benefits of higher wages exceed the costs.

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