Arizona businesses on losing end of initiatives - East Valley Tribune: Business

Arizona businesses on losing end of initiatives

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Posted: Thursday, November 9, 2006 5:59 am | Updated: 4:17 pm, Fri Oct 7, 2011.

Arizona business interests suffered two key losses in Tuesday’s balloting as voters increased the minimum wage and mandated improved treatment of farm animals - a measure that has important implications for agribusiness.

Another issue that split the business community was passage of a complete ban on smoking in bars and restaurants. That measure, Proposition 201, was supported by the Arizona Hospitality and Restaurant Association although some of its members supported the rival Proposition 206, which would have allowed smoking in bars and some restaurant areas that have separate ventilation systems. It was defeated.

Steve Chucri, president of the association, said the group supported 201 because it created a uniform law across the state to replace the hodgepodge of differing regulations in cities.

Voters approved proposition 202, which increases the state minimum wage beginning Jan. 1 from the current $5.15 an hour to $6.75 for workers who do not receive tips, and from $2.13 to $3.75 for tipped workers. Also automatic increases are mandated in future years indexed to infl ation.

Farrell Quinlan, vice president of policy development for the Arizona Chamber of Commerce and Industry, said the immediate economic impact will not be great because most Arizona workers are paid more than the minimum wage, and the economy is strong. He said the impact may be greater when the economy goes into its next recession cycle.

“Generally speaking, we have a very good economy now,” he said.

“The problem will be when the economy takes a downturn, which is bound to happen sometime. Then it will be harder for small businesses to create the jobs to get us out of the recession.”

The chamber had urged a “no” vote on the wage increase, but Quinlan said it was difficult to get the message through on the possible negative effects.

Chucri said consumers probably will see an increase in menu prices, but he doesn’t expect any increase in restaurant closings. Also he thinks consumers will accept price hikes.

“We certainly hope the consumer will continue to patronize our restaurants, because they are the ones who are likely to have voted for the increase,” he said.

That scenario was disputed by Rebekah Friend, president of the Arizona AFL-CIO, who said there’s no evidence that restaurant and other prices rose rapidly in other states that increased the minimum wage.

“I see increases in restaurant prices all the time,” she said. “I don’t know that minimal increases aren’t what people expect anyway.”

She said the measure will benefit the local economy by increasing the income of lowwage workers by $4,000 a year, which is likely to be spent for basics such as food and shelter.

“The increase goes right back into the economy,” she said.

The price of pork is likely to rise as the result of approval of Proposition 204 dealing with the treatment of farm animals, said Jim Klinker, administrator of the Arizona Farm Bureau Federation.

Only one operation near Snowflake is affected by the measure, which requires an increase in the size of holding pens for pregnant sows.

But it employs 130 people and produces most of the hogs raised in Arizona, Klinker said. The future of that operation is uncertain, he added.

“They’re going to have to look at the price of hogs and figure out if the requirement to build new barns, redo plumbing systems and hire more employees to manage the hogs will pencil out,” he said.

Klinker denied the animals are mistreated, saying the pens are necessary for pregnant sows to be protected from nonpregnant female pigs.

If animal rights activists continue the campaign in other states, the hog-raising business could eventually move to other countries, he said.

“That’s typically what happens when you drive production costs up,” he said.

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