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State Minimum Wage May Go To Voters.

Until 2006 Arizona had no minimum wage of its own, with employers required to pay only what the federal government mandated. The measure approved that year by voters not only created a state minimum wage but required annual increases tied to inflation. The result is that Arizonans now have to be paid $7.65 an hour, 40 cents more the federal minimum. House Majority Leader Steve Court said the current economic situation makes annual adjustments a bad idea. But Rep. Ruben Gallego said the soft economy is precisely why the law is necessary.

"Right now," said Gallego, "there are so many people who are actually working minimum wage jobs that normally would not be working minimum wage jobs. These are people that are working two minimum wage jobs just to make up for the income that they had two years ago."

He said the annual inflationary hikes help these families at least stay even. But Court said they also mean Arizona employers have to pay their minimum wage workers 5 percent more than companies elsewhere.

"It's a competitive issue with other states being able to compete there," said Court. "You're right. Most of it is restaurant industry or hotel industry. But still, they're having to give raises to employees at a time when their business is down and hurting them."

On Monday, the House gave the measure preliminary approval. But the final word will be up to voters in November.