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This week Arizona formalized an increase to the state minimum wage, set to hit paychecks in January 2024. The increase will see a 50-cent increase, taking the minimum wage up to $14.35. In 2006 and reaffirmed in 2016, voters voted to require inflation-based adjustments to the state minimum wage annually. The annual adjustment happened this year based on the Bureau of Labor statistics revealing that inflation came in around a 3.7% increase from August 2022 to August 2023.
The wage increase is expected to receive a formal announcement later this month when the Industrial Commission has its regular meeting.
While this wage increase will affect most of the state, there are two cities that operate on their own wage promises, Tucson and Flagstaff. Tucson made a pledge after an election two years ago to raise the minimum wage to $15 by 2025. They currently had a minimum wage of $13.50 and were set to increase it to $14.25. However, they have a design in which the wage will decrease to whichever wage is higher, so they too will have a minimum wage of $14.35.
In Flagstaff, their minimum wage is currently $16.80. Based on their inflation adjusting, they will increase their wage to at least $17.40 in January. The number has not been confirmed by city officials yet, so the number could actually be higher. Per a city mandate, they have to stay at least $2 higher than the rest of the state’s minimum wage. With the increase to $17.40 or higher, they will significantly pass that threshold.
The interesting part of this minimum wage increase is that it will likely not affect much in terms of what employers pay their employees. This is not to say that employers will go against state law and pay below minimum wage, but rather that many, if not most, have to offer above minimum wage already. Many businesses are struggling to find employees which has resulted in them offering higher wages to attract applicants. This particularly has affected the restaurant and fast food industries.
Previously, the restaurant and fast food industries ran campaigns urging voters to not vote into action a state minimum wage.
With the wage increase, the wages that are already over minimum wage will likely increase as well. Many companies are beginning to automate as much as possible in order to reduce the number of employees. Chipotle is currently testing a robot tortilla chip maker named “Chippy.”
