As newly elected members of the Flagstaff City Council prepare to be sworn in this month, business owners are curious to learn what the future may bring.
One of the biggest questions is the impact of Proposition 418; its defeat last month means Flagstaff’s minimum wage will rise to $15.50 by January 2021, or $2.00 above the state’s rate. At the start of 2019, the rate will reach $11.00.
More than half of Flagstaff’s voters upheld the 2016 citizen’s initiative Proposition 416, maintaining the minimum wage increase schedule.
Incoming councilmember Adam Shimoni, who received the highest number of votes, said Flagstaff residents have spoken. While employers will pay their employees more, he said it is up to locals to make the economy strong. “I believe in having a local, sustainable economy that does not rely on outside business models coming in and just providing jobs,” Shimoni said. We can pay a local business owner the extra 50 cents or $2 for an item and keep the funds in Flagstaff, he added, instead of sending it out of the city to a corporation’s headquarters.
As a proponent for the higher minimum wage, Shimoni also is working to solve the challenge for non-profits with fixed state funding amounts. Adults with disabilities, along with their families, were at the centerpiece of the Prop 418 debate. Some Flagstaff group homes have already moved operations to Phoenix, and others may follow suit.
“The voters are clear they want the minimum wage to go up,” Shimoni said. “That is not the same as the voters wanting people with disabilities out of our town.” The councilmember-elect thinks additional state funding is one potential solution.
Fellow incoming councilmember Regina Salas is less optimistic about the long-term effects of the higher wage. Of the three council candidates who opposed raising Flagstaff’s minimum wage above the state’s level, just Salas earned a seat, edging out Paul Deasy.
From the business perspective, there will be a ripple effect and the cost of living will go even higher, said Salas. As a business consultant, she works closely with small businesses and local non-profits. The wage increase will cause greater competition from businesses outside the city limits as price-conscious individuals look for ways to save money, Salas added.
Since the election, Salas is observing reactions of locals as they examine and change their business models, looking for ways to absorb higher labor costs.
Flagstaff newcomers Margie and Scott McPeak are just learning the specifics of doing business in the city after buying the downtown business Olive the Best. The couple owned a tax preparation business in Nebraska before relocating this fall to be closer to family.
“We’ve always believed in paying good people well,” said Margie. “Our model is different than some, because we can work the floor and hire a part-time person to fill in the gaps,” she said.
The welcome from fellow business owners has been unexpected and appreciated, say the McPeaks. “So many people have come by and offered support,” Margie said.
Both Shimoni and Salas said they look forward to working closely with business owners like Scott and Margie McPeak, looking for solutions to challenges and supporting a healthy local economy. FBN
By Theresa Bierer, FBN
Cutline: Margie and Scott McPeak, new owners of Olive the Best, said they look forward to learning more about the Flagstaff City Council and the Minimum Wage Act.
Photo by Theresa Bierer
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