How Arizona’s Minimum Wage Changes Will Impact Employment Trends in the Next Five Years

By Jezabel Southard

Posted on August 10, 2018

Last November, Arizona voters approved a statewide minimum wage Arizona flag - minimum wage increaseincrease.

This measure will increase the minimum wage in phases until it reaches $12 per hour by 2020. This bill also guarantees a minimum number of paid sick days each year for the majority of employees.

It is estimated that by 2020, more than 850,000 workers in the state will personally see a higher salary in their paychecks.

The employment market is constantly evolving, and with this change there are several potential trends that could impact workers and employers in the coming year.

Employment and minimum wage trends to keep an eye out for:

1. Guaranteed Benefits

The benefits of the wage increases go beyond just an increased hourly rate. It is now mandated that all organizations provide sick leave options for both part-time and full-time staff. This will allow workers more flexibility and peace of mind should they become ill.

2. A Focus on Retention

With higher wages and required sick leave, workers may see opportunities to switch employers and still receive the same benefits. This means employers are at risk to see increasing turnover rates and must take proactive measures to retain their talent. While they are already facing increased overhead costs due to the wage increases, having to constantly recruit due to high turnover rates will drive costs higher. Organizations will need to employ aggressive retention strategies to help reduce or maintain turnover rates.

3. Automation is Poised to Grow

As overhead costs rise (such as wages), businesses look to methods that constrain these expenses. When these costs are coupled with a tight labor market, many employers are accelerating automation. From manufacturing processes to self-service customer service kiosks, employers are able to replace the costs of an employee with automation that will allow them to significantly lower costs long term.

4. Impact on Workers

In a recent study, artificial intelligence and automation was found to put over one-third of positions in the Phoenix area at risk to be replaced. Workers with less education (such as a high school degree or less) are at the highest risk for replacement. While this is the same group of individuals poised to benefit the most from the minimum wage increases, their positions are vulnerable to replacement.

Navigating Arizona’s Minimum Wage Trends and Employment Laws

The constant shifts in the employment market can be difficult to manage or navigate for both employers and workers. By partnering with local staffing firm, businesses and job candidates gain the support and expertise of a top employment expert.

TERRA Staffing Group is an expert in the employment market in Arizona and can help you meet your staffing and career goals.

Contact the recruiting team at TERRA Staffing Group today to learn how we can support you.

Categories: HR and Management Advice, HR Compliance & Labor Laws

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