Arizona Minimum Wage Rising to $15.65 in January 2027
PHOENIX — Arizona’s statewide minimum wage will rise 50 cents to $15.65 an hour on Jan. 1, 2027, the 11th consecutive annual increase required by a 2016 voter-approved law that ties the rate to inflation.
The adjustment follows the U.S. Bureau of Labor Statistics’ August Consumer Price Index, which showed a 3.4 percent year-over-year increase driven largely by higher gasoline prices linked to Middle East tensions. State law requires the figure to be rounded to the nearest nickel. The current rate of $15.15 took effect in January 2026. Tipped workers may still be paid $3 an hour less if their tips bring total earnings to the full minimum. Tucson’s local ordinance will push its rate to $16, while Flagstaff’s will reach $19.
The increase stems from Proposition 206, approved by voters in 2016. That measure raised the wage in steps to $12 by 2020 and then required annual inflation adjustments based on August-to-August national CPI data. Efforts in the 2026 legislative session to raise the base rate to $18 died without becoming law.With midterm elections set for Nov. 3, 2026, candidates have not issued detailed statements specifically opposing or endorsing this automatic 50-cent adjustment, because it is already required by existing statute. Broader positions on wages and affordability, however, show a partisan split.
Democratic Gov. Katie Hobbs, seeking re-election, has emphasized affordability and described a “living wage” as one that covers housing, utilities and food. She has not called for repealing the inflation index. Her campaign highlights tax cuts she signed, including provisions that eliminate taxes on tips and overtime. Republican nominee Andy Biggs, a congressman endorsed by President Trump, has criticized Hobbs over job and wage growth and generally favors reducing government mandates on businesses. No public statement from Biggs directly addresses the January 2027 increase.
In competitive congressional races, Democrat Amish Shah (District 1) and JoAnna Mendoza (District 6) align with party support for wage protections, while Republicans Jay Feely and incumbent Juan Ciscomani typically emphasize business costs and market-driven pay.
Democratic-backed bills to accelerate the minimum wage beyond inflation indexing failed in the Republican-controlled Legislature earlier this year.
The scheduled increase will apply to most private-sector employers regardless of size, with limited exemptions for very small businesses, certain family members and government workers. Employers have until January to update payroll systems.
Arizona Minimum Wage Rising to $15.65 in January 2027
Arizona’s minimum wage will increase 50 cents to $15.65 on Jan. 1, 2027, due to 3.4% inflation. See how 2026 midterm candidates like Hobbs and Biggs stand on wages.
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