PHOENIX — Arizona’s minimum wage is set to increase from $12.15 an hour to $12.80 an hour on January 1 under a law approved by the state’s voters in 2016.
This year’s increase is the second since the phased-in wage increases hit $12 an hour and automatic increases based on cost of living increases kicked in.
The state’s minimum wage was just $8.05 an hour when groups that advocate for low-income workers collected enough signatures to put a ballot measure boosting the lowest wages on the ballot.
The measure was opposed by Republican Gov. Doug Ducey and business groups but passed by a wide margin.
Greater Phoenix Chamber Public Affairs Vice President Mike Huckins told ABC15 a lot of businesses likely won’t feel the impact of this increase this time around because of the worker shortage.
“Companies have had to, you know, up their compensation package, along with other benefits to attract workers,” Huckins said.
For small businesses that are still paying minimum wage, it could force them to find the extra dollars to pay their employees in other places.
“That’s going to either have to come from raising prices, or hiring less workers, or cutting workers,” Huckins said.
Changing Hands Bookstore Co-owner Gayle Shanks in Phoenix, though, said the benefits of giving her employees more pay outweigh the costs to her bottom dollar.
“Not only does your business have to be sustainable, but your employees’ lives have to be sustainable, as well,” she said. “We retain employees because they're happier, they're healthier.”
Shanks’ business has been paying above minimum wage for years, she said.
“It's so important, I think, as a small business owner to be ahead of the curve, instead of behind it and not wait for the state legislature to pass the minimum wage law,” Shanks said. “Think for yourself about those employees that are on the front lines of your store and especially now in this age of COVID.”
The minimum wage in Arizona will be more than $5 higher than the national minimum wage, which is set at $7.25 an hour.
According to the Labor Law Center, Arizona will have the fifth highest minimum wage in the nation in 2022.