Minimum Wage Increase Costs Arizona Jobs

A bump in Arizona's minimum age, now up to $7.25 per hour from $6.95 since last January, is costing Arizona jobs.

According to AZBiz.com, HR Wise, a professional employer organization in Mesa, estimated the 35-cents per hour bump in the minimum wage cost businesses in the state $1.2 billion more per year. The figure includes matching taxes business pay the government.

The increase came three months after the collapse of the financial markets.

This change meant that Arizona's minimum wage in 2009 exceeded the federal minimum wage through the first half of 2009. The federal minimum wage increased to $6.55 per hour in July of 2008 and then again in July of 2009 to $7.25 per hour.

According to the U.S. Census Bureau, the Phoenix metropolitan area has lost 7.8 percent of its jobs over the last year. No other metropolitan area has lost a higher percentage of jobs.

Many businesses couldn’t afford that $1.2 billion and were forced to terminate or reduce the hours of their employees.

The article states that the consumer price index, upon which Arizona basis its minimum wage increases, has decreased every month this year from what it was a year ago. The August-to-August drop was 3.25 percentage points, the U.S. Labor Department announced last week.

Arizona’s minimum wage law has no provision for being reduced.

It might sound paradoxical to say that raising the minimum wage in a state would lead to job loss, but that is what's happening in Arizona. Instead of reveling in an increased standard of living, many workers in Arizona are now jobless and are forced to fall in line with the thousands already competing for jobs.

Another city in Arizona, Tucson, has lost 7.5 percent of its jobs last year, according to the U.S. Census Bureau. It is second only to Phoenix in terms of most severe job loss percentage in the nation. Detroit comes in third.

Michigan voted to bump its minimum wage up to $6.95 per hour in October 2006 and subsequently increased it twice more so that it now stands at $7.40 per hour.