HR Management & Compliance

New Year, New Wages: Arizona Minimum Wage Increases to $10.50, $11 in Flagstaff

The second of four annual increases in Arizona’s minimum wage kicked in at midnight on January 1, 2018, boosting the base rate from $10 to $10.50. Voters gave themselves the raise and paid sick time when they adopted Proposition 206, the Fair Wages and Healthy Families Act, in November 2016.minimum wage

Flagstaff voters claimed an even bigger raise for themselves, with the minimum wage in the High Country city rising to $11 per hour on January 1. It increased to $10.50 on July 1, 2017.

Minimum wage hikes are locked in for at least the next two years, with the Arizona rate scheduled to rise to $11 in 2019 and $12 in 2020 and the Flagstaff rate scheduled to increase to $12 in 2019 and $13 in 2020. In 2021, Flagstaff’s minimum wage will climb to $15 per hour, while the statewide minimum rate will resume being adjusted annually based on an inflation index.

Opponents of the voter initiative argued it was a job killer. So far, however, Arizona’s employment data do not bear that out. The state unemployment rate was 4.3% in November 2017, the most recent data available. By comparison, the state’s unemployment rate was 5% in November 2016.

Over the same period, the national unemployment rate fell as well, but the drop was two-tenths of a percentage point less, from 4.6% in November 2016 to 4.1% in November 2017. The federal minimum wage remains at $7.25, unchanged since 2009.

Here’s another indicator: just released an analysis of the best cities for finding a job, and four Arizona cities were in the personal finance website’s top five. Chandler and Scottsdale were number one and two, while Peoria and Gilbert were number four and five. Breaking up the Arizona block at the top was San Francisco at number three. The website compared more than 180 U.S. cities—the largest 150 by population plus the two largest in each state—across 26 key indicators of job-market strength, including job opportunities, employment growth, and average monthly starting salary.

Notably, Flagstaff is too small to be included in the analysis. The lack of snow reportedly is hurting the city’s winter tourism business just as the third minimum wage increase in a year becomes effective in the city’s boundaries.

Dinita L. James, a partner in the Arizona law firm Gonzalez Law, LLC, is the editor of Arizona Employment Law Letter. You can reach her at or 480-565-6400.

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