November 28, 2021
  • November 28, 2021

These 10 states have the highest minimum wages

By on September 26, 2021 0

There are many ways to keep your personal finances in good shape. However, having a good salary is often the key to good financial health.

Unfortunately, if you are a newbie employee (or even a skilled employee in a low-wage industry) your earnings are likely based on minimum wage. In many states, that means the federal minimum wage – which is a measly $ 7.25 an hour for eligible employees.

Although the federal minimum wage has stagnated since 2009, some states have taken on the issue of lackluster minimum wages. Not only do some states have a higher than average minimum wage requirement, but many also have laws that automatically raise that minimum each year (or a fixed number of years) to accommodate inflation.

Top 10 States for Minimum Wage Workers

Thirty states have minimum wages above the federal minimum. However, many of these states only beat the federal rate by about a dollar. In fact, of the 30 states with a higher rate, only 10 states offer minimum wage workers $ 12 an hour or more.

According to the US Department of Labor, the ten states with the highest minimum wage are:

  1. Washington: $ 13.69
  2. Massachusetts: $ 13.50
  3. California: $ 13.00
  4. Connecticut: $ 13.00
  5. Oregon: $ 12.75
  6. New-York: $ 12.50
  7. Colorado: $ 12.32
  8. Arizona: $ 12.15
  9. Maine: $ 12.15
  10. New-Jersey: $ 12.00

Washington, DC is technically not (yet) a state, but it’s also worth mentioning with a minimum wage of $ 15.20. If DC achieves statehood, it will likely have the highest state minimum wage in the country.

Of course, it’s not uncommon for cities to have their own minimum wage limits. A number of other cities also have higher minimum wages than the state surrounding them. For example, New York and Seattle both have a minimum wage of $ 15, which is several dollars more than their state’s minimums.

Salary is more than a number

While the rates in some of these states may sound too good to be true, it’s important to remember that the number itself doesn’t tell the whole story. For example, many states on this list are home to some of the most expensive cities in the country. Thus, when the cost of living is taken into account, the purchasing power of minimum wage workers can be severely limited.

The type of employee you are will also affect the amount you earn. Tipping workers, for example, tend to have much lower minimum hourly wages; the federally-imposed minimum wage for tipped workers is only $ 2.13 an hour. (Technically, employers are supposed to make up the difference if your pay plus tips don’t match the $ 7.25 hourly rate, but not all employers comply with this requirement.)

There are also a number of exemptions in various states – and at the federal level – for small businesses, as well as for certain groups of workers. A common example is that companies that earn $ 500,000 per year or less may be exempt from federal minimum wage mandates.

A future at $ 15 an hour?

The federal minimum wage has been stuck at $ 7.25 for more than a decade, without even a bump to keep up with inflation. For years, workers have called for an increase in the federal minimum wage to not only fight inflation, but also to keep up with the soaring cost of living.

Currently, the minimum wage target touted by politicians is $ 15 an hour. While that would be a modest bump in some states, the increased bank account would likely propel many other minimum wage workers out of poverty. Unfortunately, as popular as the idea may be, it’s slow at best.

A number of cities have their own minimum wage requirements of $ 15 an hour, but these cities have such a high cost of living that even $ 15 an hour may not be a living wage. And there aren’t any states yet that have a minimum wage close to that $ 15 target. But some areas are working on it, albeit slowly. Florida, for example, recently passed legislation to raise the state’s minimum wage to $ 15 by 2026.

Given the current state of affairs in the federal government, it definitely looks like the minimum wage war will be fought (and won?) At the state level rather than the federal level. And these 10 states have a solid head start.

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