Wage battle: How Phoenix restaurants are faring a year after minimum wage increase

Research Professor of Economics Lee McPheters deciphers the positive 2017 numbers and explains why he doesn’t expect a negative effect on business in the future.

The Minimum Wage and Paid Time Off Initiative, or Proposition 206, increased statewide minimum wages, to the dismay of some and delight of others. The rate at the time of the initiative’s passage was $8.05 an hour, and it’s set to increase to $12 an hour by 2020. The steady raise began with $10 an hour on Jan. 1, 2017. By year’s end, a 50-cent boost will make it $11. Though restaurant owners call it “a job killer,” hiring numbers and food and beverage jobs in the Valley went up in 2017.

In this post in the Phoenix Business Journal on Jan. 19, 2018, Research Professor of Economics Lee McPheters comments:

 “The area everybody thought would be hardest hit, food service, in fact is the strongest single source of growth in Phoenix in 2017,” said Lee McPheters, a research professor of economics in the W. P. Carey School of Business at Arizona State University and the director of the school’s JPMorgan Chase Economic Outlook Center. “When all the final end-of-year numbers come in, we’ll probably have added about 12,000 new jobs, which is an all-time high for food-service employment.”