Arizona’s minimum wage to increase by over a dollar in 2023

PHOENIX — Arizona’s minimum wage is about to increase more than a dollar an hour to keep up with the cost of living.

Starting Jan. 1, the state’s minimum wage will go from $12.80 to $13.85, an increase of over 5%.

“The minimum wage adjustment is really designed to help workers that make minimum wage be able to afford the same standard of living as they did the year before,” said Danny Court, a senior economist at Elliott D. Pollack & Company.

Court explained Arizona voters in 2016 passed Proposition 206. In doing so, they approved increasing the minimum wage and tying it to inflation.

There are a few exceptions, including workers who earn tips or gratuities. Employers can pay them $3 an hour less than the minimum wage but must ensure those workers still get the minimum wage for all hours worked.

Workers in Flagstaff will see an even higher minimum wage, at $16.80 an hour. That’s up from the current $15.50 per hour. For tipped workers, it’ll go from $13.00 an hour to $14.80 an hour.

Court said for employers who have a lot of workers making the minimum wage, this will be “an extra cost for their business.”

“If they can’t make it up by selling whatever they sell at a higher price, there could be these tradeoffs of, ‘Can I afford these employees,’ or ‘Do I invest in maybe capital or equipment instead of another employee?’” he said.

Court added for most employers, the impact will be minimal.

“In our current job market, with more job openings than job seekers, there’s a lot of upward pressure on wages,” he said. “So many employers have already increased their wages above minimum wage to stay competitive and recruit the employees they need.”

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