By: Joshua C. Black, Esq.
For the fifth consecutive year, Arizona is scheduled to raise its minimum wage.
The Industrial Commission of Arizona recently announced the state’s minimum wage will increase from the current $12.15 per hour to $12.80 per hour, effective Jan. 1, 2022. The 65-cent an hour raise will result in a $26 a week increase for full-time employees.
The minimum wage increase applies to all businesses in the state – no matter the industry or size of the organization. The only exception to the rule applies to servers and other tipped employees who can still be paid $3 per hour less than the minimum wage, as long as their wages and tips combined equal at least minimum wage.
The wage hike is a result of Prop 206, which voters approved in 2016. The proposition increased the state’s minimum wage each year until it reached $12 per hour in 2020. After that, the proposition required the minimum wage to be adjusted annually based on the rate of inflation, which is determined each August.
While it is unquestionable that families are better off when incomes increase, an increased hourly wage can also aid the economy as a whole. Raising hourly wages can reduce employee turnover, lessen the wage gap and create a better local economy, thanks to an increase in consumer spending.
According to Elise Gould, Senior Economist at the Economic Policy Institute, "A fair wage doesn't just help low-income people, it helps the economy grow by giving more money back to consumers."
With the competitive job market right now, industries that usually pay employees minimum wage – restaurants, hotels, retailers – are struggling to find enough people to fill job openings. One of the solutions to the worker shortage has been to increase hourly pay above the minimum wage as well as to increase perks or incentives to attract new employees. Countless businesses in the Valley have started paying well above $12.15 for entry-level jobs in order to fill shifts necessary to keep businesses open and operating.
Minimum wage increases demonstrate an improved understanding of the challenges facing the working poor. However, while the increase helps those being paid the absolute legal minimum, it will not likely have an impact on those making slightly above minimum wage. The required increase only applies to employees making exactly minimum wage and there is no incentive (or penalty) to encourage employers to extend the wage increase to other employees.
The global pandemic caused many workforce challenges that are now forcing business owners to shift their focus away from the mindset of, "how do I get the most for the least" to "how do I provide a competitive workplace where both my company and its employees can grow and prosper?" Hopefully, this mentality is here to stay, for the benefit of workers and the economy as a whole.
If you feel you have been mistreated at work or have questions about your rights in the workplace, contact the Law Office of Joshua Black, PLC, at (623) 738-2225.