In 2017, Arizona voters approved a minimum wage increase culminating in a required $12 per hour by Jan. 1, 2020. Navajo County will of course adhere to the new law but not without complications.
According to Assistant County Manager Bryan Layton, the increase will directly affect only 22 people in the county’s employ. However, the wage compression issue is a larger concern. “We only have about 22 people at minimum wage right now. The increase will cost the county under $40,000 in wages and benefits per year for those employees,” Layton said.
“The next step above that is the compression within the same job family. So if we take, for example, a lead custodian or supervisor, if they don’t receive an increase it creates that compression where your entry level custodian with no experience is making about the same as the lead. Typically, what most companies look for is to create a separation of about five percent between frontline employees and a colleague that has more responsibilities or a different designation. So using that as kind of a guide post, we have only about five individuals that that would impact which is under a $3,000 cost. What we will do is comply with the law and compensate for that compression within the same job family.”
He continued, “The tougher issues are wage inequalities between jobs that require degrees and carry much higher responsibility.”
Layton explained that the county is now in a stable financial situation that will allow them to, “find great cost effective and creative ways,” to show those long-time employees that they are appreciated. “What we want to do is to be able to give them at least something. We aren’t quite ready to go forward with that yet, but we will be looking at it as we move forward with the next budget year.”
According to Layton, the plan for the next budget is to offer merit-based pay to all county employees. “That way, we mitigate that compression in a different way. Again, we will comply with the law and move forward in a way that works best for our employees and our bottom line.”
For many years, Navajo County has not been in a financial position to offer wage increases. With the recent creation of the jail tax district Layton said, “We now have a steady revenue stream and have set aside sort of a rainy day fund. In my talking with other counties, its been made clear that they have mitigated the compression by increasing their wages gradually. Because Navajo County has not been in the position to do that, our wages have remained stagnant for 10 to 11 years.”
Navajo County, according to Layton, is also concerned about employee turnover and retention. Wage compression is partially at fault for the one in five employees who have left the county in the last year. Those, Layton said, “Have been our long-term people, they have been with us a long time but are seeing that there isn’t much room for advancement. We are working on that as well. I think more than anything this is going to give us an opportunity to get creative with how we compensate our employees. I mean, something on their paychecks.”
Layton is sure there will be no lay offs as a result of the wage increase. Minimum wage will rise to $12 per hour on Jan. 1, 2020.
