Arizona’s hourly minimum wage on Jan. 1 increased $0.75, which puts it at $12.80 after accounting for the previous year鈥檚 cost-of-living increase.
The increase is in accordance with , which Arizona voters passed in 2016 and mandates the minimum rate that employers are allowed to pay in the state. Under the law, the minimum wage is adjusted on an annual basis in line with 鈥渢he percentage increase as of August of the immediately preceding year over the level as of August of the previous year of the consumer price index鈥ith the amount of the minimum wage increase rounded to the nearest multiple of five cents.鈥
Individual Arizona cities and towns have also passed minimum laws. Tucson is set to push its minimum wage up to $15 per hour on January 1, 2025, with the multiyear phase-in beginning at $13 per hour as of April. Flagstaff voters in 2016 approved a city-level wage law that ensures the city鈥檚 hourly minimum wage will . The Flagstaff minimum wage for 2022 is $15.50.
C.J. Boyd, organizer of the Tucson Fight for $15,, 鈥淲e鈥檙e glad that in 2016, the statewide minimum wage that passed included an adjustment for cost of living, inflation but we know it鈥檚 going up that much because the inflation this year has been pretty historic. We haven鈥檛 seen this level of inflation since 1982.鈥
Joe Galli, the senior adviser for public policy at the Greater Flagstaff Chamber of Commerce, says his organization鈥檚 members have felt the pinch from the city wage law.
鈥淔lagstaff employers face the greatest labor cost disparity compared to their counterparts and competitors in the rest of the state,鈥 Galli said. 鈥淭he hardest hit are the industries with the smallest margins of profits, including restaurants, bars and tourism-related industries.
鈥淥ur members tell us that they respond to higher mandated wages by streamlining, whether it鈥檚 automating, cutting employee hours, or reducing the overall number of employees. They pay the higher wage, but they pay it to fewer people and they pay it for fewer hours.鈥
The nationwide labor crunch is driving wage growth in early 2022, with entry-level wages in metro Phoenix and Tucson often exceeding the government-set wage floors. The government wage mandate could still prove troublesome for employers who are struggling, however, since the law puts upward pressure on labor costs without accounting for a business鈥 profitability or other economic conditions, nor does it account for an employee鈥檚 tenure or experience level.
According to the , the average hourly wage for all occupations in the Phoenix Metro area is $26.38.
Garrick Taylor, a spokesperson for the Arizona Chamber of Commerce & Industry, which opposed Proposition 206, Fox 10 that wage mandates could affect employers in metro areas differently than those in rural areas.
鈥淩ural Arizona might be a different story because workers are harder to come by, and your margins are tighter there鈥 Taylor said. 鈥淪o we鈥檙e really looking at some tough decisions in rural Arizona.鈥
Twenty five states and the District of Columbia will see minimum wage increases in 2022.
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