Where does the minimum wage go furthest in the United States? The study explains
(nexstar) – despite its multiplicity States have raised the minimum wage At the start of the year, and is expected to rise further in 2023, many of the largest cities in the country have their own minimum wage. While rates may be higher than the state or federal minimum wage, the money may not be going very far in some of those cities, according to a new analysis.
In a recent study, financial planning website SmartAsset analyzed minimum wages in 79 of the largest US cities and adjusted these rates based on the local cost of living according to data from the Council for Community and Economic Research. The cost of living includes the price of housing, groceries, utilities, transportation, and other goods and services. The researchers were looking to see where the local minimum wage goes the furthest.
Fewer than 20 of the cities analyzed had a minimum wage of $15 or more per hour, according to SmartAsset. In 30 cities, the default minimum wage is $7.25, a rate that has not changed since 2009.
Overall, SmartAsset found that residents of Denver, where the minimum wage is $17.29 an hour, “get the most bang for their buck.” The Colorado capital had the second highest minimum wage in the study and the 22nd highest cost of living.
Seattle had the highest minimum wage in the study at $18.69. But, along with the cost of living, which was also the highest in the study, SmartAsset set the Washington metro’s adjusted minimum wage to be $12.51.
Orlando had the closest minimum wage to cost of living ratio, according to SmartAsset. Thelorida city’s minimum wage of $11 has been revised down to just $10.98 due to a cost of living increase of 0.2%.
SmartAsset found that the local minimum wage is furthest away in these five cities:
- Spokane, Washington
- Buffalo, New York
- Saint Louis
Based on the SmartAsset results, there were some cities where the purchasing power of the local minimum wage was significantly reduced due to the cost of living.
Honolulu and Plano, Texas, came at the bottom of the list. Although Honolulu, at $12 an hour, has a higher minimum wage than the 14 other cities further down the list, the cost of living—85.6% above the national average—puts the average wage to just $6.47. The cost of living in Plano is lower than in Honolulu, but because it adheres to the national minimum wage, the adjusted average is $6.47.
SmartAsset found that minimum wages in these cities have the lowest purchasing power:
- Plano, Texas
- New Orleans
For the aforementioned five states, no minimum wage is set in 2023. Instead, it sees minimum wages for the five states represented at the top of SmartAsset’s list — Colorado, Washington, New York, Minnesota, and Missouri — Increase the minimum wage already this year.
The full SmartAsset study can be found here here.
After increases in 2023, 30 states will have a minimum wage above the federal rate of $7.25. Of those, only two have a minimum wage of less than $10, according to Work section: Montana and West Virginia.