OPINION: Short-sighted ballot measure threatens Alaska’s economy
Originally posted by the ADN on 10/20/2024 sourced here: https://www.adn.com/opinions/2024/10/20/opinion-short-sighted-ballot-measure-threatens-alaskas-economy/
On Nov. 5, Alaskans will vote whether to raise prices on goods and services across the state while discouraging investment and hastening job loss. Ballot Measure 1, “An Act Increasing the Minimum Wage, Requiring Paid Sick Leave, and Prohibiting Mandatory Meetings About Religious or Political Issues” is an outsider-funded referendum carrying significant hidden costs undermining the measure’s purported goals.
Ballot Measure 1′s first goal seeks to increase Alaska’s minimum wage to $15 by 2027. Alaska’s minimum wage is already a generous $11.73 per hour, with annual increases for inflation baked into the statute. Few Alaskans depend on the minimum wage (which is generally for unskilled, entry-level workers and high school students). Businesses will likely hire fewer entry-level workers and promote automation. Moreover, as Alaska’s minimum wage rises, the threshold salary level for exempt employees also rises. If Ballot Measure 1 passes, that threshold would be $62,400 by 2027 (it is currently $48,800). Wage increases do not happen in a vacuum. As labor costs jump up, so do prices. The minimum wage increase cures a nonexistent problem by making Alaska less affordable for everyone, including Ballot Measure 1′s intended beneficiaries.
Ballot Measure 1′s next provision would require employers of all sizes to provide paid sick leave. Businesses will simply pass along these costs to all of us. At the front end, mandatory paid sick leave is costly to track and administer. At the back end, mandatory paid sick leave creates a new basis for risk and liability. Experience from other states where paid sick leave has been adopted does not bode well. Businesses grapple with baseless complaints, protracted litigation, lawyers and enforcement actions. Notably, most employers already offer some form of paid sick leave to their employees and have, through time and trial, crafted plans and policies that work. Smart employers compete in the marketplace by offering attractive benefits. Government-mandated paid sick leave interferes with an already functional marketplace, adds unnecessary costs, and decreases efficiency and productivity.
Finally, Ballot Measure 1 seeks to restrict employers’ protected First Amendment rights and, in doing so, disrupt or confuse well-settled law. Since at least 1948, in Babcock & Wilcox (77 NLRB 577), the National Labor Relations Board and courts have recognized employers have free speech rights to share facts, opinions and experiences about unions and unionization with their employees. Ballot Measure 1 would purport to outlaw such communications. It is unenforceable. Outside union interests pushing Ballot Measure 1 may want to squelch free speech and deny employer rights, but the National Labor Relations Board and courts view the First Amendment quite differently.
Beyond these flaws, Ballot Measure 1 will discourage investment in Alaska. Companies entering a market typically evaluate several factors, chief of which are labor costs and government regulations. Does it make sense for us to adopt measures calculated to discourage businesses from opening shop here? We need a diversified economy. We don’t need outside political funds and unions telling us how to run our economy, especially when they will not be here to suffer the fallout.
Price increases and decreased services are not the only way we would all be paying for Ballot Measure 1. The State of Alaska estimates regulatory and enforcement costs would be $458,827, but it’s fair to question whether actual costs could far eclipse this projection. The State’s cost estimates acknowledge it will need to hire more personnel to process complaints and enforce the law. Let’s be frank — Ballot Measure 1 is nothing but another hidden tax on an overtaxed public already carrying the oppressive weight of inflation.
Finally, a host of other problems attend Ballot Measure 1. Along with increased labor costs, we will experience decreased services. Employees will see jobs lost to automation and businesses outside Alaska. As costs climb, our brick-and-mortar stores will find it harder to compete. Will our declining brick-and-mortar stores be able to survive when forced to raise prices even higher? Ultimately, Ballot Measure 1 promises much but delivers nothing. Alaskans should vote no on Ballot Measure 1.
Gregory Fisher (admitted to practice law in Alaska and Arizona), Douglas Smith (admitted in Washington), Corey Dunn (admitted in Indiana and Kentucky) and Adam Gottschalk (admitted in Alaska and Washington) are attorneys in private practice.
To learn more about the Ballot Measure visit https://www.votenoon1ak.com/