The Legislature Will Undoubtedly Kill A Tucson Group's Move To Raise The Minimum Wage. By Dave Devine A CASUALLY DRESSED group of 10 folks recently got together for an evening meeting. They were mixed in age and race, but all favored raising the minimum wage in Tucson. To finance their effort, they pushed a coffee can around the table. The few dollars collected would help to maintain the cause, at least for a short while. So why is the Tucson business establishment and the Arizona State Legislature afraid of these people? Sponsored by the People's Congress for Social and Economic Justice, The Tucson Livable Wage Initiative is an effort to ask city voters to raise the minimum wage starting next year. Under the proposed initiative, an annual cost-of-living adjustment to the initial $7-an-hour figure would also be required. If adopted at the polls in November, Tucson's minimum wage would significantly exceed the federal figure of $4.75 an hour, which will rise to $5.15 on September 1. Jeff Imig, one of the initiave's primary supporters, cites two main reasons for the effort. First, it would bring the minimum wage up to an inflation-adjusted figure equal to what it was more than 25 years ago. Second, $7 an hour would provide a working single mother with two children an annual income of $14,560, just about the federal poverty level. While several states have had minimum wages higher than the federal standard in the past, Imig knows of no other city that has enacted one. Despite that, he believes the initiative will succeed in helping working poor families. Standard economic theory would dismiss the effort as naive and counterproductive. Many economists argue raising the minimum wage simply means higher unemployment among the very people such a measure is trying to help. As David Seligman summarized in Fortune magazine two years ago, "The economics profession as a whole has always believed...that increasing the minimum wage decreases employment." Because of its local nature, critics complain the initiative would encourage business flight from the city to the county and create competitive disadvantages for those businesses that remain. Imig points out, however, the city's 2 percent sales tax poses a similar problem for many businesses, without apparent major impacts. Even though many economists would predict higher unemployment if the initiative were adopted, some might not. A conclusion of a collection of papers on the minimum wage published in Industrial and Labor Relations Review in 1992 concluded "none of the studies suggest that, at current relative values of the minimum wage, large disemployment effects would result from modest future increases in the minimum wage-increases up to, say, 10 percent." Of course, the Tucson measure would raise the federal minimum by 36 percent, so that conclusion might be different. While economic theories disagree over the impacts of raising the minimum wage, so do some Tucson business people. A small survey indicates views range from very positive to extremely negative. Most of those we contacted thought a successful initiative would force layoffs of lower-paid employees. Interviewees also voiced fears that the price of goods and services, like childcare, would rise. Another frequent comment was that some businesses would close or leave the city. However, one business manager said Tucson companies could cope with the increase. Wages are too depressed in Tucson, this businessperson said, adding the initiative seems like a great idea. Despite these economically based differences of opinion, those passing initiative petitions claim to have found widespread public support. Imig says women and people of color, two groups that would benefit by the measure, are the most excited about it. He also reports more than 5,000 signatures have been collected so far, with a goal of 20,000 by the early July deadline. Less than 11,000 valid signatures are required, but the group wants to prevent a reoccurrence of what happened two years ago. At that time, after hundreds of hours of effort, they fell short of obtaining enough valid signatures to get the measure on the ballot. This year it probably won't be a lack of signatures that keeps the issue from being voted on. Instead, it will be the Arizona Legislature. Encouraged by the Tucson Metropolitan Chamber of Commerce and other large business groups, the state House of Representatives, on March 3, passed a bill prohibiting a minimum wage in Arizona communities higher than the federal level. The vote was 35 to 24, almost strictly along party lines. The bill is still under consideration in the state Senate, where its approval is all but assured. One key Republican who would have to defect if passage were to be threatened, Tucson's Ann Day, says she will probably vote for the measure. Day believes it will provide greater predictability in economic development efforts if all communities in Arizona have the same minimum wage. She also cites the tradition of allowing federal law to set the rate. So despite the determined efforts of a handful of concerned citizens, The Tucson Livable Wage Initiative will probably never be seen on the ballot. What are the group's other options? One is to ask the Tucson City Council to place the idea before the voters as an advisory referendum. Or, they could push for local legislation similar to that adopted in January in St. Paul, Minnesota. That community requires higher wages to be paid by businesses receiving economic development incentives from the city. Imig blames Tucson's deplorably low wages in part on city government's practice of granting tax breaks to corporations that hire temporary workers, pay them low wages and don't provide benefits. Not only would the St. Paul approach address those issues, but it could be implemented by four votes on the City Council. But don't look for such a proposal to pass the Council anytime soon. In general, Tucson's economic powers continually advocate for more government subsidies to low-wage industries like tourism. They also support sweetheart deals like the one under which the Chamber of Commerce pays only $1 a year to use the publicly owned land their office building occupies. But at least the St. Paul measure is an option which the state Legislature probably wouldn't prevent from happening.

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