Inflation Pushes Minimum Wage Up by $0.51 for 2023

High inflation means higher pay in 2023. Thanks to an automatic adjustment, the state minimum wage is rising from $10.34 per hour to $10.85.

Inflation Takes, Inflation Gives

The extra $0.51 amounts to a 4.9 percent raise, matching the increase in the urban consumer price index (CPI-U) for the Anchorage metropolitan area during 2021.

Voters passed a ballot initiative in 2014 to adjust the minimum wage annually for inflation. The Alaska Department of Labor and Workforce Development takes the CPI-U from the year prior to the announcement, so the wage in 2023 lags inflation in 2022. The same lag was responsible for the flat minimum wage going into 2022, based on prices dropping in early 2020 despite surging prices in 2021.

The increase for 2023 is the largest annual jump since the fixed $1 increments added in the two years following the 2014 ballot initiative.

The Alaska minimum wage applies to all hours worked in a pay period, regardless of how the employee is paid—whether by time, piece, commission, or otherwise. All actual hours worked in a pay period multiplied by the Alaska minimum wage is the very least an employee can be compensated by an employer unless the employer can clearly show that a specific exemption exists.

Tips do not count toward the minimum wage. Further, under Alaska law, public school bus driver wages must be no less than twice the current Alaska minimum wage. Also, certain exempt employees must be paid on a salary basis of not less than twice the current Alaska minimum wage based on a forty-hour work week to maintain their exempt status.