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New Year, Same Old Minimum Wage

by | Jan 4, 2022 | Government, News

©Charlene Key | Dreamstime.com

When 2022 arrived, Alaskans working for minimum wage received an annual inflation adjustment of zero, holding their pay at $10.34 per hour.

Not Enough Inflation to Adjust

The disappearing automatic raise was hardly a surprise. The Alaska Department of Labor and Workforce Development announced in October that the minimum wage would remain flat for the new year.

Ever since a 2014 ballot initiative, the minimum wage has been adjusted each year based on the Consumer Price Index for urban consumers in Anchorage (Anchorage CPI-U) in the preceding calendar year. In 2020, prices started dropping and inflation was, for a while, negative. With no net inflation, the adjustment is zero, maintaining the $10.34 hourly wage that took effect on January 1, 2021.

The previous inflation adjustment was $0.15, based on the Anchorage CPI-U in 2019. The minimum wage had risen by as much as $0.30 the previous year.

The negative inflation that bottomed out in 2020 was over by the end of that year. The Anchorage CPI-U steadily climbed to new highs, reaching 6 percent by October 2021, according to the latest data from the US Bureau of Labor Statistics. As a result, barring any radical economic swings, employers will pay a significantly higher minimum wage in 2023.

Current Issue

Alaska Business November 2022 Cover

November 2022

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 in order to maintain their exempt status.

The federal minimum wage is $7.25 per hour. Workers in Alaska are entitled to the higher state-mandated minimum.

Alaska Business November 2022 cover
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