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PHOENIX -- The head of the state's restaurant industry is gearing up to convince voters to quash an initiative that would boost the state's minimum wage to $12 an hour by 2020.

Steve Chucri, president of the Arizona Restaurant and Hospitality Association, said Wednesday the campaign against the measure will be based on showing them how much wages in Arizona have gone up since voters enacted the first minimum wage law in 2006.

Prior to that, Arizona employers had to pay only what was mandated in federal law, which was $5.15 an hour. The ballot measure pushed that to $6.75, with a requirement for annual adjustments based on inflation.

That has pushed the current state minimum to $8.05.

"The public will say, 'Enough's enough,'" Chucri said. And he said polls done for the industry in the spring show people believe that $12 is "too much."

The comments come as Arizonans for Fair Wages and Healthy Families is planning to submit its petitions for the $12 wage plus required paid leave today to the secretary of state's office.

Spokeswoman Suzanne Wilson said organizers have collected more than 250,000 signatures. That is 100,000 more than are needed to qualify for the ballot.

But Chucri said he's not convinced his organization will even have to fight the battle in November. He questioned whether petition circulators, both volunteer and paid, were careful to ensure that those who signed are qualified to vote in the state.

Arizona has become the latest battleground over what can be considered a living wage.

Several states have enacted their own laws, often through legislation. Most recently, California Gov. Jerry Brown signed a measure that will take that state's minimum, now $10 an hour, up to $15 by 2022 for large employers; small companies will get another year to comply.

Chucri said part of the campaign against the ballot measure will be to remind voters here that Arizona already has a minimum wage that's higher than what federal law requires.

And that same law requires annual revision. Chucri pointed out that has meant a boost every year except for two when the rate of inflation was too small for even a nickel more, the bare minimum adjustment.

The difference, though, is not great: That $8.05 an hour is just 80 cents more than the federal minimum.

What Chucri also faces is that $8.05, assuming it's a family's sole source of income, translates out to $16,744 a year.

For a single person, the federal government considers anything below $11,880 a year to be living in poverty. That figure is $16,020 for a family of two and $20,160 for a family of three.

That's part of what has driven similar living wage efforts elsewhere in the country. But Chucri said the idea of a $12 minimum won't sell here.

"That is too high of a wage for a place like Arizona,'' he said.

Chucri said part of the campaign against the ballot measure will be the argument that higher wages mean fewer jobs.

"Restaurateurs are going to survive,'' he said. But what they will do, Chucri said, is simply hire fewer people.

He pointed out the push toward automation already is underway.

At Panera Bread, customers place their orders through computer screens and then can pick up what they want. And even at more traditional sit-down place like Applebee's, orders can be placed through tablets at each table.

Chucri conceded, though, that is happening even in places where the minimum wage is not going up. What approval of this measure would do, he said, is hasten the day.

"I don't think it's a matter of 'if,' '' Chucri said. "It's a matter of 'when.' ''

He would not say how much his group and other business organizations intend to spend to kill the measure.

The most recent campaign finance reports show campaign organizers have raised more than $342,000. Virtually all of that comes from Living United for Change in Arizona. But Tomas Robles, former executive director of LUCHA, said much of that is from a grant to the organization from The Center for Popular Democracy, an organization involved in efforts to establish a $15 minimum wage nationally.

Another $25,000 came from The Fairness Project which has its own efforts to push higher minimum wages on a state-by-state basis.

By Howard Fischer

Source

Two liberal advocacy groups have published a provocative study accusing the Department of Housing & Urban Development and the Federal Housing Finance Agencyof helping Wall Street at the expense of low-income communities by selling non-performing loans to investors.

The Center for Popular Democracy and the ACCE Institute’s report “Do Hedge Funds Make Good Neighbors?:  How Fannie Mae, Freddie Mac and HUD are Selling Off Our Neighborhoods to Wall Street” is lengthy and accusatory.

The study looks at how HUD has since 2012 auctioned off, at a discount, some 120,000 Non-Performing Loans that they want to get off their books.

They also take into account similar actions by the FHFA through Fannie Mae and Freddie Mac, which have sold over 10,000 mortgages already this year. 

The study, which can be read here, notes that nearly all of the roughly 130,000 mortgages have been sold to Wall Street hedge funds and private equities firms, leading to what they call the rise of a new phenomenon in this country – Wall Street as major landlord and neighbor in communities across the country.

“An initial examination into four of the largest purchasers of HUD and FHFA loans has unearthed an array of disturbing business practices, ranging from those that clearly run counter to the goals of homeownership preservation and neighborhood stability to those that break laws, deceive homeowners, and harm taxpayers more generally,” the study claims. 

The authors argue that HUD and FHFA should sell these troubled mortgages to entities working to preserve homeownership and create affordable housing, not to Wall Street speculators with a history of defrauding taxpayers and harming homeowners, tenants and neighborhoods.

“Nearly eight years after the start of the global financial crisis, hedge funds and private equity firms have found yet another way to make big profits: distressed housing assets. Often, the very same corporate actors that precipitated the housing crash in the first place are buying and selling off delinquent mortgages and vacant houses that are a product of the crash,” the study says. “Together, these Wall Street entities have raised over $20 billion to buy the notes for as many as 200,000 homes in the United States. The newly consolidated single-family rental market is a lucrative business. A 2014 study estimated that the four largest holders of these assets have seen as much as a 23% rate of return on the properties they purchased in the last three years.”

However, HUD has been making changes to how it deals with distressed assets and NPL sales.

Just two months ago, HUD announced significant changes to its Distressed Asset Stabilization Program. HUD also announced additional improvements to the Neighborhood Stabilization Outcome sales portion of DASP which are aimed at increasing non-profit participation.

Updates include giving non-profits a first look at vacant properties, allowing purchasers to re-sell notes to non-profits, and offering a non-profit only pool.

Previously, loan servicers could foreclose 6 months after they received the loan and were encouraged, though not required to assess a borrower’s qualifications for loss mitigation programs. Purchasers of the geographically targeted neighborhood stabilization pools have always been required to ensure that at least 50% of the loans in a pool achieve outcomes that help areas hardest hit by foreclosure avoid the neighborhood decline associated with numerous vacant properties.

“These changes reflect our desire to make improvements that encourage investors to work with delinquent borrowers to find the right solutions for dealing with the potential loss of their home and encourage greater non-profit participation in our sales,” said Genger Charles, Acting General Deputy Assistant Secretary, Office of Housing, when it was announced. “The improvements not only strengthen the program but help to ensure it continues to serve its intended purposes of supporting the MMI Fund and offering borrowers a second chance at avoiding foreclosure.”

The groups are calling on HUD and FHFA to “establish much higher standards and criteria for the kind of companies that are eligible to purchase delinquent mortgages” and to “prioritize companies that have a clearly defined program to offer permanent modifications with principal reduction and to create affordable housing with vacant properties.” ?

They also want FHFA to “immediately begin to offer principal reduction in their own modification process.”

“Two distinct paths forward are available: the abuses of the biggest purchasers to date of the HUD and FHFA non-performing loans; or, the approach of community development financial institutions with both the ability and the commitment to create affordable housing to better local communities. The status quo benefits the very actors that hastened the financial crisis and actively created the conditions that sucked over half the wealth from millions of American families. These companies profit from new predatory practices and speculative business models that once again take advantage of ordinary people,” the study concludes.

Source: HousingWire