Tucson’s minimum-wage workers got raises for 2026

Tucson’s lowest-paid workers started the year with raises.

The minimum wage in Arizona rose by 45 cents, from $14.70 to $15.15 an hour. In Tucson, the minimum increased from $15 an hour to $15.45 an hour.

Tucson’s minimum is higher than the state’s requirement because in 2021, voters approved the Tucson Minimum Wage Act, which set it higher than the state’s floor within the city limits.

Both the state and city minimums are automatically adjusted for inflation.

Tipped workers in the state went from $11.70 to $12.15, and in the city, they got raises from $12 an hour to $12.45.

The pay bump can be hard for business owners, especially in the restaurant, hotel and retail industries, said Michael Guymon, chief advocacy officer for the Chamber of Southern Arizona.

Guymon said the business group, which was formed by a merger of the Tucson Metro Chamber and economic development organization Sun Corridor last year, did not have a formal position on the minimum wage.

But he noted that the Metro Chamber was opposed to Tucson’s 2021 ballot initiative.

“There’s a balance between how much you can price things and there’s a tipping point to where people just won’t pay that amount anymore,” Guymon said. “In the restaurant, in the hospitality industry, they need to keep things at a certain price, but as their labor costs continue to increase, that becomes more difficult, especially with thin profit margins. So if their profit margins are between 3 and 5 percent, then if you have an increase like this, they either have to increase those prices – which they really don’t want to do, because they could price them out of the willingness of people to pay – or they need to make modifications.”

Those changes could include assigning fewer hours or investing in automation to eliminate jobs entirely.

Ray Flores, who oversees his family’s various El Charro restaurants, said “most of our folks are already north of that minimum wage anyway.”

But he does start some employees at minimum wage when they are in training or other special circumstances, so the wage increase “is significant.”

He sees the increase as one more expense for restaurants that already face tight margins and higher costs for food, utilities and other essentials.

“I think it’s natural and needed to have a market that moves wages, moves wages forward, through competition and through business channels that make sense,” said Flores. “What I don’t like, of course, is over-stress from the government.”

Anthony “Rocco” DiGrazia, owner of Rocco’s Little Chicago Pizza on Broadway’s Sunshine Mile, said he gave all his employees a 50-cent-an-hour raise to start 2026. He said it comes out to an extra $20 a week for each of his 47 staffers.

“So it’s not insignificant,” DiGrazia said. “And I gotta make up for that shortfall somewhere, whether it’s raising prices or cutting hours and tightening the ship, or whatever. But it’s coming from the same pool that it came from last time.”

DiGrazia said that all of his employees were making more than minimum wage before the increase, especially after accounting for tip sharing.

“Nobody makes less than $21 an hour with the tip sharing,” DiGrazia said. 

DiGrazia said he’s noticed that people are spending less on eating out, possibly because they’re feeling pinched by higher costs for housing, groceries, utilities and other essentials.

“I’m just glad we’re as busy as we are,” said DiGrazia, who moved into a new location down the street from his original location in the wake of the Broadway widening project. “We seem to be well established, and we’re beloved to a certain number of people, and that’s definitely keeping us fairly busy. But I’m sure we would see more butts in seats if the economy wasn’t a little bit sketch right now.”

Jacki Kuder, the co-owner of Kingfisher, said nearly all of the Midtown restaurant’s roughly 40 employees already make more than the minimum wage. While some tipped employees make minimum wage, they generally average more than $25 an hour thanks to their tips, she added.

She said the higher wages will likely cost the restaurant about $10,000 annually.

“We strive to provide living wages for all of our staff,” Kuder said. “Overall this year, the costs of doing business as a locally owned non-chain restaurant has increased significantly, from the insurance that we provide to our employees, to the costs of goods rising due to inflation, tariffs, environmental impacts, and more. We try not to pass on too many of the costs to guests, but margins in this environment are increasingly shrinking, and there’s only so much the market will bear.”

Pete Turner, who owns the Illegal Pete’s on University Boulevard west of the UA campus, said he’s happy to see the increase.

Turner, who started Illegal Pete’s in Colorado about three decades ago, said he already starts Tucson employees at the current Denver minimum wage of $18.81 an hour before tips. After tips, his average employee here earns about $23 an hour, according to Turner.

He said that for the last decade, he has striven to pay full-time employees a livable wage because he didn’t like the idea of his employees “needing to work two to three jobs to survive and pay your bills.”

“I questioned why couldn’t we, as an industry, sustain a living wage so our team could work one job and raise a family,” Turner said. “I am personally passionate about it.” 

Hitting the goal of a livable wage has gotten more challenging as the cost of living – and particularly, the cost of housing – has climbed, he said.

But while he has found a way to pay his employees more, he said he can understand why other restaurant owners, working on tight margins, can’t do what he’s been able to do.

“I am very empathetic with the fact that all costs are rising everywhere, and people in my industry, while I know that they celebrate their teams earning more money, they are also squeezed by costs,” Turner said.