TUCSON (KVOA) - Minimum wage workers in Arizona are now seeing increased wages with the start of the new year.
Due to a law going into effect on January 1st, 2023 the minimum wage in Arizona has been raised to $13.85 per hour, up from $12.80 last year.
Workers who receive tips will now receive a minimum hourly wage of $10.85, the fifth highest tipped wage in the country.
While the increase is sure to be celebrated by the workers receiving the benefits, several local small businesses are not happy about the change.
With high food costs and inflation taking its toll across many industries, some small businesses are going to feel severe impacts.
"We've never seen food prices this high before and now we've never seen labor costs this high either," said Grant Krueger, owner of Union Hospitality Group which operates several popular Tucson restaurants.
Krueger worries the wage increase will actually make some employees' situations worse and actually worsen inflation.
He's seen a disparity grow already with the latest increase, he said many of his highest paid employees are servers and front of house staff making tips that are now making more with the wage increase while many of his back of house staff are left with less.
Krueger believes his veteran staff who are experienced and making more than minimum wage are starting to see new, more inexperienced staff, coming in and making almost as much. This he said is causing an internal rift among dedicated employees.
"These are the employees who actually take it the worst because they are feeling the effects of inflation too. They've got increased costs of food, increased cost of gas, increased cost of child care and yet legislatively these guys aren't getting a raise too," Krueger said.
With all the growing expenses Krueger said they may be left with no choice but to review menu prices and perhaps even consider cutting jobs. He believes this is a predicament facing most restaurants in the state now.
"Suddenly you're looking at an industry that's going to make things pretty tight for sole providers to get by so everyone's going to have to tighten their belts and really hunker down for 2023," he said.
At the small family owned Joe's Pancake House on Tucson's eastside, which has been a local favorite for 39 years, times are also tough with growing costs even though business is good.
Mary Brindley is the general manager and daughter of the owner. She said they have seen the costs of just eggs go up by 400%.
"We are doing everything we can to make sure we are getting the best deal, saving money where we can and making sure thee stuff is happy our customers are happy to make it another 39 years," she said.
The wage increase will certainly add to those expenses but she believes it pales in comparison and said they are all about taking care of their workers. Many are already making more than minimum wage because of years, sometimes decades, of service. She said they are giving them a raise anyway.
"We appreciate what they do for the business, so when the minimum wage does go up so does their base salary or hourly because they are worth more to us than the minimum wage," she said.