Alaska’s rising minimum wage means more to salaries than you might think

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Downtown Anchorage. Alaska’s minimum wage must legally increase at the same rate as consumer prices in Anchorage. (Dev Hardikar/Alaska Public Media)

Alaska’s minimum wage will increase to $11.73 per hour next year, under the terms of a 2014 ballot initiative. The voter-approved statute is an attempt to keep up with inflation, and mandates that the minimum wage must rise each year at the same rate as consumer prices in the Anchorage area.

But Dan Robinson, who leads the state’s labor research department, says there are probably very few Alaskans who currently make minimum wage. One McDonald’s in Juneau, for example, has been advertising a starting pay of $18 an hour, Robinson says.

“Market forces, as strong as they are with the labor shortage, have almost certainly had much more of an effect on how much people are making than the minimum wage has in recent years,” Robinson said. “Or will with this increase that’s coming in the beginning of 2024.”

Robinson said other than a small handful of states, most of the country hasn’t been using minimum wage to attempt to keep up with the cost of living in recent years.

“It’s kind of become – not kind of – it’s become a less relevant driver of anything,” Robinson said. “Because it just hasn’t nearly kept pace with inflation in most states, and that would be true for Alaska long term as well.”

But a separate state law dictating the minimum compensation for salaried employees likely is a factor for many Alaska workers. Jeremy Applegate works in the state’s Wage and Hour department, and he said with the exception of government workers, if salaried employees are exempt from overtime pay, they generally need to be making at least double the minimum wage.

Applegate said his team made a point to include the minimum salaries in the wage increase announcement this year to help educate employers.

“Because it is a major way in which people can easily violate that,” Applegate said.

That minimum annual salary for exempt workers is rising from $45,136 this year to $48,796.80 for 2024. Applegate said anyone with questions or concerns about Alaska’s wage rules can contact the Wage and Hour office.

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Michael Fanelli reported on economics and hosted the statewide morning news at Alaska Public Media. 

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