Arizona, Florida and San Jose, CA, all recently announced annual cost-of-living adjustments to their minimum wage rates.
Effective January 1, 2014, the minimum wage rate will rise from $7.80 to $7.90 in Arizona, from $7.79 to $7.93 in Florida and from $10.00 to $10.15 in San Jose.
Arizona, Florida and San Jose are among the several municipalities and the 10 states that make annual adjustments to their minimum wage rates based on the rate of inflation. Colorado, Montana, Ohio, Oregon and Washington already have announced their changes. Vermont and Missouri are expected to announce their adjustments soon. Nevada, which is the only state with annual inflation adjustments that do not take effect January 1 of each year, will announce its change, if any, by April 1.
Variations in the size of the minimum wage increases are the result of differences in the base rate and of the different indexes to which the annual inflation adjustments are tied. Arizona's 10-cent increase resulted from a 1.5 percent change in the Consumer Price Index for All Urban Consumers from August 2012 to August 2013, rounded to the nearest nickel. Florida's 14-cent increase is based on the 1.7 percent change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the South region from September 2012 to September 2013. And San Jose's 15-cent increase is based on the 1.5 percent change in the Consumer Price Index for Urban Wage Earners and Clerical Workers from August 2012 to August 2013.
Both Arizona and Florida allow employers to pay a lower minimum wage rate to tipped employees as long as their tips cover the difference between the lower minimum wage rate and the normal minimum wage rate. This minimum wage for tipped employees is expected to go up from $4.80 to $4.90 in Arizona and from $4.77 to $4.91 in Florida.