Arizona’s minimum-wage workers will get at least a dime-an-hour raise in January — their first increase in two years — no matter what voters decide in November.
New figures Friday from the Bureau of Labor Statistics show that the Consumer Price Index for all urban consumers increased 1.1 percent between August of 2015 and last month, largely because of higher health-care costs.
What’s important about that is a 2006 voter-approved initiative requires the Industrial Commission of Arizona to adjust the state’s minimum wage each year based on the August figures.
The current minimum wage is $8.05 an hour. The Industrial Commission, using a slightly more detailed calculation, translates the inflation to about 8.6 cents. But the law also requires the commission to round the figure to the nearest nickel, and that means a dime increase starting Jan. 1.
That 10 cents an hour will add $208 a year to the wages of a full-time worker, before taxes, moving the new minimum annual wage to $16,952 for full-time work.
The commission is scheduled to formally approve the increase next month.
It could go up a lot more.
In November, voters will get a chance to decide whether to impose an immediate increase to $10 an hour, with future boosts until it hits $12 an hour by 2020. At that point, the same CPI index would kick in again for future increases.
How many Arizonans will benefit from a boost in the minimum wage is unclear.
The most recent figures from the BLS show about 44,000 in the state who are at or below the federal minimum wage of $7.25 an hour.
Both state and federal laws allow for lower minimum wages for workers who also get tips; Arizona’s 2006 law provides a $3 an hour “tip credit,” allowing companies to pay that much less to their workers who can supplement their pay with gratuities. Also, some firms are exempt from the federal Fair Labor Standards Act.
If voters approve Proposition 206, about 770,000 Arizonans — about a quarter of the workforce — currently earn less than $10 an hour and would get an immediate boost, said campaign manager Tomas Robles, citing BLS statistics.
There also would likely be a ripple effect, with employers forced to pay more than $10 an hour to keep more experienced workers.
That could drive up the median wage in Arizona, most recently listed by BLS at $16.67 an hour. That’s the number at which half of those employed are making more and half are making less.
The median federal wage is $17.40 an hour.
