Chambers of Commerce sue to overturn the will of the voters on Minimum Wage Initiative


RaiseTheWageThe incoming Speaker of the House, J.D. Mesnard, just happened to suggest on Monday that there appears to be legal grounds for someone to sue to overturn the Prop. 206 minimum wage hike approved by voters, but it won’t be him (wink, wink). House speaker mulls minimum wage lawsuit:

As to litigation, Mesnard said at this point he’s moving to take the case to court.

“I’m not spearheading anything,” he said. “Until today, I had no legal staff on hand,” Mesnard said, saying others may have to take the lead.

Mesnard does not need to file a lawsuit when he has the masters he serves in the Arizona Chamber of Commerce and Industry to do it for him. Mesnard’s feigned knowledge of a lawsuit was political Kabuki theater. He was coordinating with the Chamber and he knew full well when he made his “suggestion” of a lawsuit that the Chamber was prepared to file a lawsuit to overturn the will of the voters this week. Suit filed to block minimum wage hike:

Unable to defeat it at the ballot, business interests are now trying to get a judge to void the voter-approved hike in the state minimum wage.

The lawsuit filed Thursday in Maricopa County Superior Court contends Proposition 206 violates a constitutional provision which requires all measures that increase state funding to also have a specific dedicated funding source. The initiative does not spell out where the state will come up with the additional dollars it will need to cover the higher costs incurred by those who have contracts with the state to provide various services like health care.

Attorney Brett Johnson, hired by the Arizona Chamber of Commerce and Industry, points out that the Arizona Health Care Cost Containment System already has posted a notice that it intends to increase what it pays to providers to compensate for the fact the minimum wage will go fro $8.05 an hour now to $10.

AHCCCS officials have estimated the additional cost for the next six months at close to $48 million, with $11 million of that to be borne by the state.

More to the point, Johnson said those additional dollars will come out of general tax dollars, leaving less money for other priorities. And he said that is exactly what the constitutional provision about an identified funding source is designed to prevent.

But James Barton, attorney for Proposition 206 supporters, said there is no basis for the claim. He said nothing in the ballot measure actually requires the state to increase its reimbursement rate to providers.

In fact, Barton noted, the constitutional provision that is the basis for the Johnson’s challenge specifically says if a state agency believes an initiative increases its expenses but fails to provide the funds, the legal remedy is to simply refuse to spend the money. He said the fact that the state, on its own, may choose to increase reimbursement rates to compensate providers for their higher costs — something our Tea-Publican controlled legislature is loathed to do — [but this] does not mean the initiative is illegal.

A hearing is set for today before Judge Daniel Kiley.

When this losing argument fails, the Chamber has a few more legal theories up its sleeve.

Johnson also contends that the measure violates a separate constitutional provision which requires that ballot measures be limited to a “single subject.” He contends Proposition 206 runs afoul of that because it not only mandates higher wages but also requires employers to provide workers with at least three days a year of paid personal leave.

Note: In 2006, Arizona voters approved Proposition 202, the Arizona Minimum Wage Act, by a citizens initiative which set a higher minimum wage and adopted an automatic annual cost of living adjustment. Proposition 202 also gave local governments the right to enact their own higher minimum wage and “other benefits of employment,” e.g., paid time off. (A.R.S.§ 23-362, Paragraph I). In July 2015, the Court ruled that Arizona cities can raise the minimum wage.

[Johnson contends] “These topics should have been addressed in two separate ballot measures, rather than combined to encourage voters for one proposal to accept changes in the other,” the lawsuit states.

But Barton points out that the requirement for separate ballot measures applies only to constitutional amendment. Proposition 206 only amended state statute. Johnson, in his legal filings, concedes the point but nevertheless urges the court to apply the requirement in this situation.

Because we are the Chamber of Commerce and we own this state, dammit! We are entitled to special privileges because we rule this state!

What else has the Chamber got?

Johnson has one other legal theory in his bid to void the initiative.

He points out that the Industrial Commission of Arizona must prepare notices that employers are required to post at worksites about things like minimum wage requirements. Johnson contends that the cost to this agency is another example of an unfunded mandate.

Barton scoffed at the argument that will mean increased expenses, saying the commission produces all sorts of notices all of the time. And even if there were a cost, the relief for the agency is to refuse to spend the money, not to void the entire law.

You will recall that the Chamber organizations and Arizona Restaurant Association did not spend a great deal of money to try to defeat Prop. 206 on the merits. Their strategy was always to try to overturn the will of the voters in court if Prop. 206 passed.

In addition to the Arizona Chamber of Commerce and Industry, also signing onto the lawsuit were the Greater Phoenix Chamber of Commerce, the Tucson Hispanic Chamber of Commerce, Greater Flagstaff Chamber of Commerce, Arizona Licensed Beverage Association, and the owners of Valle Luna Inc., which runs several restaurants in the Phoenix area.

Tomas Robles, who chaired the pro-206 campaign, reacted angrily to the bid to kill the measure, which was approved on a margin of 58-42 percent.

“This lawsuit is just another example of the chamber and, frankly, Arizona Republicans trying to ignore the will of the voters,” he said.

Technically, the Arizona Republican Party is not involved in the litigation. But it opposed the initiative and Republican lawmakers attempted earlier this year to undermine the effort by crafting their own alternative which could have confused voters. That proposal was approved by the Senate but died in the House.

A strike-everything amendment to HCR2014, proposed by Sen. Don Shooter, would have declared a uniform minimum wage a “matter of statewide concern” in an attempt to void local ordinances authorized by the voters of this state in the Arizona Minimum Wage Act. Under Shooter’s proposal, counties, cities and towns would no longer have the explicit right to adopt their own minimum wage or employee benefit policies.

The successful initiative is built on a 2006 ballot measure [Prop. 202] which established Arizona’s first minimum wage at $6.75 an hour. Until then, employers were subject only to the federal $5.15 minimum.

With mandated inflation increases, the wage is now $8.05 an hour.

Proposition 206 sets the new floor at $10 an hour in January, rising to $12 by 2020, with future increases linked to inflation.

As with the original measure, there is a $3-an-hour “tip credit,” meaning employers whose workers get tips can pay as little as $9 an hour in 2020. But the statute also requires proof that the workers actually get that much in tips.

The new measure also has something not in the 2006 measure: the mandate for paid time off.

Local governments had the discretion to enact paid time off policies under Prop. 202 previously, something our Tea-Publican controlled legislature sought to void.

You will recall that earlier this year our lawless Tea-Publican legislature sought to gut the 2006 Minimum Wage Act. I previously posted about this multi-pronged attack on the Arizona Minimum Wage Act by our lawless Tea-Publican legislature and Governor “Il Duce.” Action Alert: GOP war on the Arizona Minimum Wage Act is up for vote in the House today, and Action Alert: GOP war on the Arizona Minimum Wage Act is in the Senate today.



  1. Well, the minimum wage increase affects the 60,000 or so workers in Arizona making the minimum wage or less, not the entire nation.

    David Neumark wrote an entire book, “Minimum Wages” available with a click on Amazon, which carefully ground through hundreds of studies, separating those with proper controls, to feather out the impact of minimum wage on the poor.

    His conclusion, minimum wage reduces incomes for the poor by reducing the jobs available to them. Reduces their arc of income gains over time by denying them those crucial starting jobs.

    These effects are hard to discern when you have had an economy that is growing as robustly as that of the United States over the last 36 years.

    If we had continued to stagnate, the devastating effect of minimum wage would have been obvious. However, now that we are likely to take off again, the effect will once again be obscured, but nevertheless very real. Thousands of jobs will be lost, thousands of people will be trapped on welfare who might have escaped and the futures of thousands of people will be forever diminished.

    • Except that in the real world, more often than not, raising the minimum wage does not hurt jobs or the poor.

      Lift your head up from the propaganda, Master of Sockpuppets, we have real world experience with these things.

      By your thinking, countries with no minimum wage laws and no regulation would have the highest standard of living. Instead we call them Third World Countries.

      • Every country in South America has a minimum wage and in each country it has devastating effects.

        All those shanty towns on the hills of Brazil and the hordes of garbage pickers? Produced by a minimum wage that locks them out of the regular economy.

        That’s why we do research, to understand the real world. When you create or increase a minimum wage, it restricts access to the ladder of economic opportunity. It gives jobs to the children of rich white people that would otherwise go to poor people of color.

        It’s effects are racist and destructive, all for very little benefit – after three years, 85% of people at the minimum wage have moved ahead.

        Read the book, Dave Neumark, Minimum Wages, available on Amazon Kindle.

        • Your perpetuation of the myth that increasing the minimum wage will cause people to lose their jobs is simply NOT TRUE.

          In a letter to President Obama and congressional leaders urging a minimum wage increase, more than 600 economists, including 7 Nobel Prize winners wrote, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”

          Every right-winger cites David Neumark as if he is God. David Card and Alan Krueger refuted Neumark’s attempt to prove their 1992 fast-food worker minimum wage study was wrong, back in 2000. Of course, Neumark continues to peddle his debunked research because he gets paid by the right-wing to do so.

          • What? You think I am not going to buy the study because it costs $10 from JSTOR?

            Read it carefully to find the multiple slights of hand.

            Conservatives may or may not cite Neumark. I have never seen anyone cite him except for myself. I first ran into him when he was on a PBS newshour panel – hardly a right wing outlet. I then read his book several times. I don’t get the impression he has any ideology at all. He is just a very good researcher. But, being non-ideological and good in academia is sure to get your demonized.

            As Steve points out, you don’t have to even look at the empirical research, basic microeconomic theory is clear – price control on wages denies the poor access to entry level jobs – both immediately reducing their incomes while simultaneously denying them the human development during their most formative years that would power their entire lives.

            Minimum wage is most devastating to Blacks – just look at the 80+% unemployment in the 16 to 24 year old age group. Then look at the homicide rate.

  2. Raising the minimum wage now will remove 2 million people from government assistance, because currently McDonald’s and Walmart and the rest don’t pay living wages.

    We make up the difference, subsidizing billionaires and shareholders.

    So the price of a Big Mac goes up .43 cents, I don’t care, I can choose to buy a Big Mac or not, and for the most part my taxes are not involved.

    And since people at the bottom of the income scale pay in percentage more tax than the wealthy, this should add to state and local revenue, people making minimum wage spend every penny, they do not save or invest in the stock market.

    You’d think that would be a conservative cause.

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