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Flagstaff’s minimum wage set to increase to $15.50 on Jan. 1

Minimum wage
AP, file
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Flagstaff's minimum wage will increase to $15.50 on Jan. 1. It's more than $3 above Arizona's statewide rate and the highest in the state.

Raising the minimum wage has been a high-profile topic both locally and nationally in recent years. In Arizona, Flagstaff is at the center of that debate with the highest minimum wage in the state. The city has been gradually raising it in recent years, and on January first it’ll again increase to $15.50 an hour, more than $3 higher than the state’s.

To help sort through the changes, KNAU’s Ryan Heinsius spoke with Chris Rhode who oversees the city’s Office of Labor Standards, which is in charge of enforcing the minimum wage.

More information can be found on the city’s website.

Ryan Heinsius: Have businesses in Flagstaff generally been complying with the city’s wage rules?

Chris Rhode: In general, yes. You’re always going to have a couple that issues arise with, but this office has been in existence for five years now and over that time we’ve seen the number of complaints go down. The first year or two, in 2017 and 2018, when we really for the first time dealing with this, we did see a higher number of complaints, and over that time, businesses have learned about the wage, they know its effects. So, it’s something I think that businesses have become accustomed to and as such they’re complying with it more and more. Far and out, we’re seeing a lot of compliance and we haven’t had too many allegations in recent years of people grossly being paid under the minimum wage.

RH: Flagstaff’s minimum wage goes up to $15.50 on Jan. 1. How did we get to this point and why will it be higher than $15 and hour?

CR: Back in 2016 the citizens of Flagstaff put on the ballot and then voted to pass Proposition 414, and that is the minimum wage law that governs the City of Flagstaff. Its goal was to get us to $15 an hour over five years in the year 2021, five years after 2016 we’re at $15 an hour. But it had a provision in there to keep going after that point. So, next year we’ll jump to $15.50 and that will be the last prescribed year where the number of the wage value will be set in stone. After that, beginning in 2023 it will be adjusted every year based on the Consumer Price Index. So, depending on what inflation is over that period of time, we’ll see the minimum wage adjust accordingly to that going forward.

RH: And inflation right now is obviously on a lot of people’s minds as it is at its highest level in 40 years. From what you’ve observed, has that, combined with Flagstaff’s higher than normal minimum wage – has that exacerbated the already steep cost of living here?

CR: Well, you know, I don’t have hard numbers for you on that so I can’t answer that probably in as black and white terms as you would like. I can’t give you just a straight yes or no to it. But obviously, the cost of living is very high in the city of Flagstaff, but that was part of the push to pass this wage ordinance back in 2016, was that the cost of living is higher so people should be making more money. It’s certainly possible that some prices will go up for things because businesses will have to pay their employees more, but at the same time there’s hope that those employees making more will put more into the economy and will allow them to live in Flagstaff when maybe otherwise they’d be priced out of it.

RH: Critics of raising the minimum wage say it costs jobs and hurts businesses. Have you seen any evidence of this in Flagstaff as part of your job?

CR: I can’t say I’ve seen direct evidence of that. But a lot of our data is kind of muddied on that, in part because two years ago we saw COVID hit the community as it did everywhere across the country and the world. That had far-reaching implications on the job market. That was only three years into our wage being in place and it kind of just muddied any data that we could have to know whether or not this minimum wage over that period time and especially over the last couple of years, has had a strong impact with it. So, it’s not something that we can really say definitively at this point, and even so, it’s pretty hard to collect that kind of local data and say, because of this one change that was made – businesses are created and go out of business all the time. We haven’t done any kind of statistical analysis or anything that has given us any definitive conclusions on that.

Ryan joined KNAU's newsroom in 2013. He covers a broad range of stories from local, state and tribal politics to education, economy, energy and public lands issues, and frequently interviews internationally known and regional musicians. Ryan is an Edward R. Murrow Award winner and a frequent contributor to NPR.