PHOENIX — Workers at the bottom of Arizona’s pay scale will get a pay bump in January.

New figures from the U.S. Bureau of Labor Statistics released Friday show consumer prices rose 0.4% in August, putting the annual rate at 3.4%. A 2006 voter-approved law requires the state minimum wage to increase each year based on those August-over-August figures. 

That will translate to 51.5 cents on the current $15.15 minimum. But the law also says the figure is rounded to the nearest nickel, which puts the new minimum at $15.65.

It isn’t just those at the very bottom who are affected. Anything that raises the floor also tends to force employers to increase pay for those already making more than that.

Danny Seiden, executive director of the Arizona Chamber of Commerce and Industry, said this annual hike puts more pressure on business.

“Every year, this is just one of several cost increases our employers are absorbing,” he said, noting that health insurance premiums tend to also rise at the same time.

But the new inflation report from BLS also shows pressure on workers — the people the 2006 law is designed to help.

Energy costs are up more than 16%, driven largely by a 27.4% increase in gasoline prices since last year. Electric bills are up 3.8%, housing by 3%, groceries by 2.7% and medical costs by 2.5%.

“Our employers aren’t debating whether employees should be paid well,” Seiden said. He said that, given the competition to find qualified workers in many communities, most companies already pay above that.

His organization was on the front lines in opposing the 2006 initiative crafted by Living United for Change in Arizona (LUCHA) that set the state minimum at $6.75 an hour. Prior to that, employers had to pay only the federal minimum of $5.15.

But even with built-in inflation in the Arizona law, the wage changes still proved too slow for LUCHA. In 2016, the organization got voters to raise the figure immediately to $10 an hour, with future increases — including the new one that will take effect Jan. 1 — tied to inflation.

The Republican-controlled Legislature has made several attempts to curb those increases.

One, for example, involved a 2019 bid to allow employers to pay part-time students just two-thirds as much as everyone else. Travis Grantham, then a Republican state representative from Gilbert, said that would encourage companies to hire more young people and train them.

That measure failed amid legal questions of whether the 1998 Voter Protection Act prevents lawmakers from tinkering with voter-approved laws.

Steve Chucri, president and CEO of the Arizona Restaurant Association, which also opposed the 2006 and 2016 laws, said no new efforts are underway to undo the minimum wage.

“We didn’t agree with that,” he said of the prior initiatives. “But, obviously, now, 20 years later, we have what we have.”

Still, Chucri said, things could be worse: Inflation was so high in 2022 that the minimum wage for 2023 went up by $1.05 an hour.

“We’re managing it,” he said. “We’re trying to manage menu prices and what we charge our customers while trying to shoulder as much as we can with increases in wages and food costs and rent. … And other things add up, like how much retailers pay when customers use credit cards.”

But he said that his organization won’t sit quietly if there’s yet another effort to further boost wages here above and beyond the minimum.

In 2024, groups backed by Service Employees International Union floated a plan to put a measure on the ballot to bump Arizona’s minimum wage — then at $14.35 an hour — to $18. That effort was scrapped.

And LUCHA Executive Director Alejandra Gomez said her organization is already pondering a ballot measure that would provide a bigger bump to the minimum.

“Next year’s minimum wage increase is an important step,” she said in a prepared statement. “But Arizona’s affordability crisis makes it clear we cannot stop there.”

Gomez said it’s also clear, just like in 2006 and 2016, that voters will have to drive that change.

“That is an important reminder that progress does not happen on its own,” she said.

“Arizonans deserve wages that actually match the cost of living,” Gomez said. “As we head into 2027, we are prepared to keep organizing and fighting for the next big step to make that a reality.”

In her statement Friday, she did not mention a specific goal. But Gomez has previously set $20 an hour as a target, something she has called a “living wage.”

Asked about that figure last year, Gov. Katie Hobbs said she could not say what an appropriate figure would be.

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