Flagstaff’s minimum wage is increasing, but not everyone is happy

The Flagstaff minimum wage is expected to increase by 60 cents next year and some small businesses are struggling to keep up.
Published: Sep. 19, 2023 at 4:01 PM MST
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FLAGSTAFF, AZ (3TV/CBS 5) — In downtown Flagstaff, you are surrounded by locally-owned family businesses. But with the ever-changing economy, some said they’re struggling to keep up with inflation and pay workers with the rising wages.

Andrea Knott opened Mozelle’s Bakery eight years ago when the minimum wage was about $8 per hour. Now, in 2024, she’ll have to start paying her employees $17.40 an hour. “I’m for people getting paid what they need to be paid and for their work, but it has been a struggle,” Knott said. “My profit margin has dropped by 40% since I first opened. With the price of ingredients going up and with the minimum wage, it’s a struggle.”

Flagstaff’s wage is higher than the state’s $14.35 minimum because of a 2016 ordinance requiring pay to be at least $2 higher than the rest of the state. Flagstaff’s management analyst Chris Rhode said it will continue to increase each year based on the consumer price index. “As things like housing and groceries get very expensive, especially in a place like Flagstaff, our minimum wage will increase each year to be proportionate to that,” Rhode said. “To make it so that those wage earners at the bottom of the scale are able to afford those daily necessities.”

For minimum wage workers already struggling to keep up with the cost of living in the city, this is good news. However, Knott said the small, locally owned businesses like hers are making tough decisions to stay open. “That’s actually what we’ve been talking about the last few weeks is whether to cut employee hours, obviously not hire any more employees or offer less items to save money on the cost of making everything,” she said.

She said with the drastic increase in pay over the last five years, the city could put this issue back on the ballot for people to vote on again and the best thing the public can do to help is shop locally.

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