Arizona Capitol

Following Protests, Bill Exempting Arizona Students From $12 Wage Hits a Snag

Protestors organized by LUCHA demonstrate against HB 2523 on Thursday, March 14.
Screenshot, LUCHA Facebook page
Protestors organized by LUCHA demonstrate against HB 2523 on Thursday, March 14.
A bill that would exempt many young people from earning Arizona's minimum wage is pitting business groups against labor advocates, rehashing the three-year-old debate over a voter-approved proposition guaranteeing $12 an hour for workers in this state by 2020.

HB 2523 would allow businesses to pay less than the state minimum wage to workers under the age of 22, so long as they are enrolled as full-time students and work fewer than 20 hours a week. It has become one of the most controversial bills of the legislative session.

The bill passed the House with Republican support in February, but appears to be facing a snag in the Senate. Central to the holdup is whether the bill could violate an Arizona law designed to protect the wishes of voters.

Sponsored by Republican State Representative Travis Grantham, HB 2523 is the brainchild of the conservative Goldwater Institute and has the backing of chambers of commerce and restaurant groups.

If this trio of interests sounds familiar, that’s because they’re the same coalition that opposed Prop 206 in 2016, which gradually increases the minimum wage to $12 by 2020 and ties it to further increases in the standard of living.

The same groups have been attempting to roll back Prop 206 ever since it passed. In 2017 the Goldwater Institute tried to get the wage hike thrown out in court. Last year the Institute released a paper suggesting that the new minimum wage would harm workers with disabilities, which disability advocates disputed.

Jon Riches, director of national litigation for the Goldwater Institute, said Grantham's bill allowing employers to pay students less is intended to help young workers. Riches pointed to a Seattle study showing that a minimum wage increase there helped experienced laborers but hurt workers just getting started in the job market.

"Those workers are the ones who are priced out of the market when the minimum wage is in place," Riches said.

(Some economists have cautioned against extrapolating results from a study in Seattle, a booming labor market with relatively few minimum-wage workers.)

Labor advocates, to no one's surprise, aren't convinced by the Goldwater Institute's reasoning.

They say the bill would override the will of voters and penalize young workers who rely on part-time work to help support their families or help pay for school. They claim HB 2523 is a blatant attempt by business interests to chip away at Prop 206.

"One year after another we see them try to mess with the wages of workers in Arizona," said Ricardo Zamudio, an organizer for LUCHA (Living United for Change in Arizona), the most prominent group organizing against the bill.

The bill has prompted protests, including a LUCHA-organized demonstration outside the capitol and at Dilly’s Deli, a Tempe restaurant owned by Republican State Representative Jeff Weninger.

Despite the protests, the bill breezed through House committees and passed 31-29 on the House floor with Republicans support and Democratic opposition.

But the legislation faces obstacles in the Senate.

Republican State Senator Michelle Ugenti-Rita, who chairs the Senate Commerce Committee, elected not to bring HB 2523 up during a meeting of her committee on Thursday. That was after scores of community members appeared at the Capitol to speak against the bill. It's unclear whether that demonstration contributed to Ugenti-Rita's decision to hold the bill. She could not be reached for comment.

Another possibility for the delay is an amendment to the bill proposed by Republican State Senator Tyler Pace requiring the bill to receive three-fourths of votes in both the House and Senate to pass, rather than a simple majority.

Pace's amendment appears to be a nod toward concerns that HB 2523 could violate Arizona's Voter Protection Act, passed in 1998 to prevent the Governor or Legislature from tampering with citizen initiatives approved by voters.

The law requires both chambers of the Legislature to get three-fourths of members on board to amend or supersede measures adopted by voter initiative. But even then, a change can't happen unless it "furthers the purpose of the measure."

Pace could not be reached for comment.