Key Points:

• Arizona’s minimum wage will rise to $15.15 an hour on January 1

• The increase is due to annual adjustments for inflation, as required by state laws

• Arizona’s inflation rate through August hit 2.9%, the highest since 2021

Arizona will soon require workers to be paid at least $15.15 an hour.

New figures Thursday from the Bureau of Labor Statistics show that year-over-year inflation through August hit 2.9%.

What makes that significant is that laws approved in Arizona by voters in 2006 and again in 2016 require the state’s minimum wage to be adjusted annually to match the change in the Consumer Price Index. That means the current floor of $14.70 will go up by 45 cents on January 1, a figure by law that is rounded to the nearest nickel.

People working in Tucson and Flagstaff will see an even higher minimum.

In Tucson, the minimum already is $15 an hour. It, too, will increase by 45 cents, to $15.45.

And in Flagstaff, the $17.85 minimum will hit $18.35 in January.

Meanwhile, the federal minimum wage remains at $7.25 an hour, a figure last adjusted in 2009. And that remains the law in 20 states. 

Many Arizonans will be affected by the latest boost.

The state Office of Economic Opportunity estimates there are about 230,000 individuals in Arizona who earn no more than $15 an hour. And that doesn’t count those who were already earning more than the old minimum, who may also get a pay bump to keep them above the new minimum.

But a proponent for what has been an ongoing fight for nearly two decades says that’s hardly a victory given how much costs have gone up since that $15 aspirational goal was announced.

Alejandra Gomez, executive director of Living United for Change in Arizona, said her group is now looking at ways to raise that to $20 an hour.

“Most Arizonans are suffering from the rising cost of housing,” said Gomez, whose organization was behind the successful 2016 initiative that took the then-current figure of $8.05 an hour up to $12 by 2020, with inflationary adjustments ever since.

“They are suffering from the rising cost of utilities,” she said.

The situation is quite different at the other end of the income spectrum, Gomez said, where wages of corporate executives are multiple times those of their employees.

Gov. Katie Hobbs said she could not say what would be an appropriate figure.

“I know that Arizonans are struggling,” she told Capitol Media Services, saying it is her job to “address that struggle.”

But the governor said it is legitimate to have a public discussion of how much people need to be paid.

“I think a living wage is where somebody can afford to keep a safe roof over their heads, that has functioning utilities and water and they can put food on the table to feed their families,” she said. “That is different for everyone.”

And what about supporting an initiative for a significant increase in the minimum wage?

“I cannot speak to language and a ballot measure I have not seen,” she said.

A ballot measure, if it proceeds, would pave the way for yet another high-profile battle with the business community which fought — and failed to defeat — both the 2006 and 2016 initiatives. And leading that opposition has been the Arizona Restaurant Association.

Steve Chucri, president of that group, is preparing his arguments. And one of them comes down to a simple question: Where does it end?

First, he said, was the fight to get wages up to $15 an hour.

“So we’re there,” Chucri said. “We’ve always stated in the past that it’s always going to be ‘Fight for $15,’ then ‘Fight for $20,’ then ‘Fight for $25.’ ”

He believes the public has had enough.

Consider, he said, the decision by California voters last year to reject Proposition 32, a proposal that would have raised the minimum hourly wage in the state to $18.

Chucri also said that an effort in Arizona to add an extra dollar to the state minimum wage — above and beyond the scheduled annual inflationary increases — failed here last year. That same measure also would have scrapped existing law that allows businesses to pay their tipped workers $3 an hour less as long as their tips reach the minimum wage requirement.

In fact, though, it wasn’t because Arizona voters rejected the measure. The failure was with the ability of proponents to get sufficient signatures to put the issue on the 2024 ballot.

Conversely, a measure offered by Churci’s organization to alter how the tip credit is calculated — and in a way that would have saved money for restaurant owners — did make the ballot. And voters rejected what the restaurants wanted by a 3-1 margin.

Gomez, for her part, said history is on her side.

Prior to the 2006 ballot measure, Arizona had no minimum wage of its own. Instead, employers were required to comply only with federal law and its $5.15-an-hour floor.

That measure, which provided for an immediate $1.65-an-hour boost and future increases linked to inflation, was approved by a margin of 2-1 despite objections from the Restaurant Association and other business groups.

The 2016 measure — the one that went to voters when the minimum hit $8.05 — also was approved handily by more than 58% of voters. Here, too, the restaurants and businesses financed the opposition.

It is that law which is now in effect, with the mandated annual inflation indexing bringing current wages to $14.70 — and $15.15 beginning next year.

Chucri said if and when a new ballot measure emerges, it will be his job to convince voters that there will be no adverse effects felt by consumers and workers.

It starts, he said, with the price tag. Chucri said the industry has reached the point where the cost of labor now is greater than the cost of the food being prepared. And to deal with that, he said restaurants are buying equipment to do what used to be done by staffers.

Chucri specifically cited a move by Chipotle, which has been using Autocado, a machine that can cut, core and peel avocados before they can be mashed into guacamole, the last part of that process the chain says, is done by hand.

“These entry-level spots in the restaurant industry that some of the workers depend on, you’re going to see replaced by technology,” he said. “They’re looking to automate more and more, given the cost of labor.”

Regardless of what the future holds, whether at the ballot box or due to inflation, that still leaves the new annual inflation figure of 2.9%, the highest since Trump took office.

But all prices are not up by the same margin.

BLS reports grocery prices were up 2.7% while the cost of eating out rose 3.9%.

Electricity prices are up 6.2% over the same time last year. But the agency figures that gasoline costs actually are 6.6% lower.

Prices on new cars rose just 0.7%, versus a 6.0% increase in purchasing used wheels.

And the cost of shelter — rent and equivalent costs for homeowners — is up 3.6%.

History of Arizona and federal minimum wage
Year / State / Federal
2006 / $5.15 / $5.15
2007 / $6.75 / $5.85
2008 / $6.90 / $6.55
2009 / $7.25 / $7.25
2010 / $7.25 / $7.25
2011 / $7.35 / $7.25
2012 / $7.65 / $7.25
2013 / $7.80 / $7.25
2014 / $7.90 / $7.25
2015 / $8.05 / $7.25
2016 / $8.05 / $7.25
2017 / $10.00 / $7.25
2018 / $10.50 / $7.25
2019 / $11.00 / $7.25
2020 / $12.00 / $7.25
2021 / $12.15 / $7.25
2022 / $12.80 / $7.25
2023 / $13.85 / $7.25
2024 / $14.35 / $7.25
2025 / $14.70 / $7.25
2026 / $15.15 / $7.25