Last Year’s Inflation Pushes Next Year’s Minimum Wage Up by Almost a Dollar
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Although consumer inflation leveled off this year, the spike from last year means higher pay in 2024. Thanks to an automatic adjustment, the state minimum wage is rising from $10.85 per hour to $11.73, effective January 1.
Biggest Bump Since 2016
The extra $0.88 amounts to an 8.1 percent raise, matching the increase in the urban consumer price index (CPI-U) for the Anchorage metropolitan area during 2022.
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 2024 reflects inflation from 2022.
The increase for 2024 is the largest annual jump since the fixed $1 increments added in the two years following the 2014 ballot initiative, beating the 4.9 percent raise for 2023.
The automatic increase was flat heading into 2022, even as prices surged, based on prices dropping in early 2020 and into 2021.
Current Issue
May 2024
Salaried employees—who are exempt from the minimum wage and overtime requirements under Alaska Statute 23.10.055(b) as bona fide executive, administrative, or professional employees—must maintain a salary that is equivalent to two times the minimum wage for the first forty hours worked in a week. Thus, effective January 1, 2024, the minimum salary for these workers will increase from $868.00 per week (or $45,136 per year) in 2023 to $938.40 per week, or $48,796.80 per year.
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.
The federal minimum wage remains $7.25 per hour, and twenty states use that level. Workers in Alaska are entitled to the higher state-mandated minimum. Eighteen states have a higher minimum wage than Alaska.
Making History
The track of oil and gas development in Alaska shows the footprints of bold companies and hard-working individuals who shaped the industry in the past and continue to innovate today. The May 2024 issue of Alaska Business explores that history while looking forward to new product development, the energy transition for the fishing fleet, and the ethics of AI tools in business.