How businesses, servers react to Flagstaff’s increasing minimum wage

FLAGSTAFF, AZ (AZFamily) — According to the Flagstaff Chamber of Commerce, the cost of living is 14% higher than the national average and more than 10% higher than Phoenix.

So, a city ordinance requires the minimum wage to stay at least $2 above the state.

Flagstaff’s minimum wage will be increasing for the eighth year in a row to $17.85 and $16.85 for tipped workers starting in January.

Restaurant owner John Conley said this has had major impacts on local businesses.

“So it’s been the most difficult four years of my 37-year career,” Conley said. “We’ve seen more closures in the last 18 months and we foresee many more closures.”

Conley is the owner of multiple Flagstaff restaurants including Salsa Brava and Fat Olive. He said the continuous increase in the minimum wage has forced cost-cutting changes from many businesses.

“As our largest expense has increased by 30% to 33%, the only way to offset that is to increase menu prices,” he said. “We have illuminated positions we have consolidated positions all as a matter to offset the minimum wage.”

Because of the citizens’ initiative Minimum Wage Act of 2016, the Flagstaff wage must increase with the state wage and the consumer price index (CPI).

However, hourly and tipped workers like server Liadan Knapp said that with Flagstaff’s high cost of living, the continuous increase is a lifeline.

“Everything is expensive. It’s impossible to save money,” Knapp said. “I don’t have any support from my parents or anything. So this job is like the only way I pay my bills.”

However, she said they’ve also felt the negatives of the increases as prices increase.

“So that means people want to tip less because they are paying more regardless of, you know, service,” Knapp said.

Conley said higher food prices have driven away local customers and tourists, who don’t fully understand why the cost is so high.

He said he’s talked with the city, which understands his concerns but said because it’s a citizens initiative, they can’t step in. He also agrees workers should be paid more as the cost of living increases, but he said there has to be a better way to do it without draining local businesses.

“No one is against a higher minimum wage. It’s just we have a poorly written minimum wage,” Conley said.

His hope is someone will bring forth a new citizens’ initiative to bring balance to the rapid increases. He also supports Prop 138, which protects the tipped worker.

“We’re also trying to manage kind of what is an unmanageable increase of our minimum wage so be patient with us,” Conley said.

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