Arizona bill that would allow employers to pay students less than minimum wage sparks controversy

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Arizona bill would allow employers to pay students less

PHOENIX – Students in Arizona see a controversial new bill as a "direct attack" on them. Small businesses are welcoming the proposal.

The bill that’s been coined as the Youth Employment Act would allow employers to pay less than the current state’s minimum wage of $11 to full-time students younger than 22 working 20 hours or less weekly. Though this wouldn’t be a requirement for employers, it would open the doors for them to pay students the federal minimum wage of $7.25.

State Rep. Travis Grantham sponsored the bill, which passed in the State House with a vote of 31-29. Grantham said they’re not attempting to cut anyone’s pay but instead to open up entry-level jobs that “went away” when the minimum wage was raised after a proposition that raised Arizona's minimum wage up to $12 an hour by 2020 was passed by voters in 2016.

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Lorena Austin is a full-time student at ASU on a full-ride scholarship but still has four part-time jobs that she relies on to get by. Though she’s over 22, she worries for her many peers who this bill would directly affect:  (Fox News)

“The Youth Employment Act is a bill that I think deals with some of the unintended consequences of our state's minimum wage law here,” Grantham said. “What we have going on in Arizona is there's a lot of folks who can't get a job in that age range of like 16 to 22 years old. Many of these people are full-time students, many of them it may be their first job they're trying to get and unfortunately a lot of employers can't pay the individuals the mandated high minimum wage numbers because these are entry-level jobs.”

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Students walk on Arizona State University's downtown Phoenix campus (Fox News)

But full-time students like Lorena Austin say the proposal amounts to age discrimination.

Austin is a full-time student at Arizona State University on a full-ride scholarship. She has four part-time jobs that she relies on to get by. She works 30 to 40 hours a week and spends about 30 hours a week studying and going to class. Though she’s over 22, she worries for her many peers who this bill would affect directly.

Students and Healthy Working Families Coalition, which included the host Living United for Change Arizona (LUCHA), protest the bill outside of the Arizona State Capitol building (Fox News)

“Already there's a huge disparity between wages and the cost of education. And students literally simply can't afford it,” Austin said. “…I think it is a matter of livelihood, it's a matter of being able—do I choose between having a roof over my head or doing well on this course? Do I choose between having food or supplies that I need for this education?”

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Austin argues that while her father was able to attend college and pay for his tuition by working part-time, that’s not the case anymore today. Austin said if a student was to work the federal minimum wage rate and pay for a semester of college, which for her is about $12,800 tuition a semester, it would take a student almost 22 months to pay it off.

Ruby Hernandez, 18, and Blanca Collazo, 17, both high school seniors, worry about the bill affecting their families and their freshman year of college in the fall. Collazo plans on attending Grand Canyon University and said her family relies on her and her father’s income. In her home of six, it’s just her and her dad working, she said.

“I know so many people who will be struggling with paying for different things like school… I don't think I'll be able to pay it off with $7.25, like, if I barely can't even pay it off with $11 that we're earning right now,” Collazo said.

For Hernandez, she said she has to work to pay off her tuition because right now, only her mom has a job.

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“If it was to go down to $7.25, I would have to worry about finding multiple jobs, not just one, because it wouldn't be enough hours to support myself, so maybe like finding side jobs…like Lyft or Uber, anything…just to help me get by to support myself," Hernandez said. "(The bill) is very discriminative towards young people and it just shows that our lawmakers are not really concerned about like how it would affect the students because they're not under the age of 22.”

Cesar Aguilar, who is executive director of the Arizona Students Association, which represents the over 580,000 university and community college students in the state, said this is a “direct attack on students.”

“If you can fight and die for your country, you should be getting the same pay as everyone else, doing the same work,” Aguilar said.

Grantham disagrees it will hurt students. In fact, he said, it will help them.

“To say that that this discriminates against somebody is actually, I find that to be quite offensive,” Rep. Grantham said. “I kind of feel like the high minimum wage standard we have discriminate against people who can't show they have the experience needed to get a job." (Fox News)

“To say that that this discriminates against somebody is actually, I find that to be quite offensive,” Grantham said. “I kind of feel like the high minimum wage standard we have discriminated against people who can't show they have the experience needed to get a job. How do we give people that first experience? We allow them to work for these companies, allow them to work for the small businesses, allow them to work in the mom and pop shops, and get that vital experience so that they can add to our economy and grow with our state.”

Grantham said “more youth will get more jobs.” Some of those jobs Grantham mentioned were grocery baggers or car dealership lot attendants. Grantham said he also wants entry jobs to be available for his daughters when they’re ready for their first job.

“It's unfortunate that a lot of our youth are being denied the opportunity to build that character, to get that first job because the job is just not available,” Grantham said.

"If I'm an employer, I don't have much of an incentive to take on a potential employee that has zero job experience and does not have the hard skills because they haven't completed their education,” Heinrich said. (Fox News)

Chad Heinrich is the National Federation of Independent Business (NFIB) Arizona director and said small businesses employ around 1 million people, which makes up more than 40-percent of the state’s workforce.

“The youth unemployment rate is roughly 12 percent nationally,” Heinrich said. “In Arizona, we have a minimum wage that is about 50 percent higher than the federal minimum wage. That really prohibits small businesses and businesses of any size from hiring folks that don't really have any work experience.”

Heinrich said hiring levels from small businesses are at a 45-year high. The problem, he said, is small businesses are having trouble finding qualified workers.

“Next year, (the minimum wage) will be $12 an hour,” Heinrich said. “So, at $12 an hour, it will be 65 percent higher than the federal minimum wage. So, that's a barrier for students that want to enter the workforce. If I'm an employer, I don't have much of an incentive to take on a potential employee that has zero job experience and does not have the hard skills because they haven't completed their education.”

“If you can fight and die for your country, you should be getting the same pay as everyone else, doing the same work,” Aguilar said. (Fox News)

Economist and University of Miami professor, Michael Szanto, said he understands both sides of the issue. He said it will particularly hurt poorer students who need the money to pay their tuition and to feed themselves.

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“We don't want this to become predatory and preying on students who are already disadvantaged, and making the situation worse,” Szanto said.

The student association and the American Civil Liberties Union are already threatening to sue if the bill passes.

Szanto said there needs to be a balance when it comes to the minimum wage that considers both small businesses and workers. But he said Arizona voters spoke their minds when they voted to raise the minimum wage in 2016—so the bill would be legal, but only “in a very narrow sense.”

“It’s in the interest of the state of Arizona and the United States as a whole, that we do everything we can to get our future leaders, engineers, doctors, etc. to be huge successes,” Szanto said. “So, we want to do everything we can to boost the chances of young adults in this country because they’re a big part of the future.”