Arizona’s minimum wage rose to $15.15 an hour on Jan. 1, a 45-cent increase tied directly to inflation as the state continues to grapple with rising living costs and a deepening housing shortage.
The increase, announced by the Industrial Commission of Arizona, raises the minimum wage from $14.70 and is required under the Fair Wages and Healthy Families Act, approved by voters in 2016 as Proposition 206. The law set scheduled wage increases through 2020 and mandates annual adjustments thereafter based on changes in the cost of living.
Under state law, the yearly increase is calculated using the Consumer Price Index for All Urban Consumers, measuring inflation between August of the previous year and August of the current year. Federal data show the CPI-U rose 2.9% between August 2024 and August 2025, triggering the new wage floor.
