Highest Minimum Wages In US

Minimum wage laws are an essential aspect of labor regulations in the United States. While the federal government sets a baseline minimum wage, individual states and cities have the authority to establish higher minimum wages to address the cost of living in their specific regions. In this article, we’ll explore what minimum wages are, why they are important and what states and cities have the highest wages.

How Are Minimum Wages Established In The US?

Minimum wages are established through a combination of federal, state and local legislation. In 1938, the Fair Labor Standards Act went into effect which creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over 40 hours a week. Since its enactment, the federal government has set a standard minimum wage and increases it every so often to help combat the effects of inflation. Unchanged as of 2009, the federal minimum wage rate is $7.25 per hour, but there have been calls for a minimum wage of at least $15 per hour as inflation heats up.

Luckily, individual states and cities have the power to introduce higher minimum wages to better reflect their local economies and living costs. This allows for a more tailored approach to ensure fair compensation for workers across different regions. The process of establishing minimum wages varies from state to state. For instance, some states have minimum wage laws that automatically adjust annually based on inflation rates, while others require legislative action, like voting, to increase the minimum wage. Often, states with higher costs of living tend to have higher minimum wages to accommodate for the increased expenses faced by workers in those areas.

What State Has The Highest Minimum Wage?

Although this location is technically a district rather than a state, according to GovDocs.com, Washington, D.C., has the highest minimum wage at $16.10. California is just behind D.C. at $15.50, and Connecticut and Massachusetts trail California by 50 cents.

5 States With The Highest Minimum Wages 

According to the Department of Labor, the states with the highest minimum wages are:

1. District of Columbia

Although this region is not technically a state, the United States’ capital leads the country in minimum wage. Unlike most states, D.C. does not have tiered wage requirements, meaning everyone minimum wage worker makes the same hourly pay, regardless of the size of their employer. D.C. is an expensive place to live and local governments recognize the need for higher wages to support workers in its thriving economy, so wages are set to increase up to $17.00 on July 1, 2023.

2. California

California has consistently been at the forefront of progressive labor policies, which is mostly due to the notoriously high cost of living. The state's minimum wage is currently $15.50 per hour, regardless of the size of an employer.

3. Massachusetts

Massachusetts has a standard minimum wage of $15.00 per hour – twice the federal minimum. Tipped employees, defined as employees who make more than $30 a month of tips, make $6.25 per hour.

4. New York 

New York has implemented a regional approach to minimum wage, with different rates based on the location within the state. The highest minimum wage in the state is $15.00 per hour in New York City, Long Island, and Westchester County for businesses with 11 or more employees. By 2026, wages in these areas set to increase to $17, while the rest of the state is set to increase to $16 per hour. Currently, the rest of the state of New York has a minimum wage of $14.20 per hour.

5. New Jersey 

New Jersey has a minimum wage of $14.13 per hour. Like the other states on this list, New Jersey’s higher minimum wage reflect its higher cost of living. Tipped employees make $5.26 per hour.

5 US Cities With The Highest Minimum Wages

According to a study conducted by Investopedia, these are the 5 cities with the highest paying minimum wages:  

1. Mountain View, California

Mountain View, home to several technology giants, strives to be a place that provides a decent standard of living for all its residents. With a minimum wage of $18.15 per hour, Mountain View is the city with the highest minimum wage. The Mountain View government takes a proactive stance in addressing poverty. The city's high cost of living, largely driven by the tech industry, necessitates a higher minimum wage to ensure that workers can afford basic necessities.

2. Sunnyvale, California

Sunnyvale is another city in the heart of Silicon Valley that has embraced the concept of a livable wage. With a minimum wage of $17.95 per hour, Sunnyvale stands as a beacon of hope for workers struggling to make ends meet in an expensive region.

3. Emeryville, California

This Northern California city has one of the highest minimum wages in the United States at $17.68 per hour. It is, however, also a pretty expensive place to live, which explains why its local government has taken such a progressive approach to wages. By offering a higher minimum wage, Emeryville aims to combat poverty and support its employees in meeting the rising cost of living. The city's proactive stance has served as a model for other municipalities striving to provide fair compensation to their workers.

4. Seattle, Washington

Seattle has embraced a higher minimum wage to address the city's high cost of living. The exact minimum wage requirements in Seattle will depend on your employer, but workers can make up between $16.50 – $17.27 per hour. By setting a higher minimum wage, the city aims to improve the lives of low-wage workers and create a more equitable society.

5. Palo Alto, Pennsylvania         

Palo Alto is an outlier on this list, as it’s the only location not located on the west coast. This Pennsylvanian city boasts one of the highest minimum wages in the country, currently set at $17.25 per hour, even though Pennsylvania’s minimum wage is only $7.25. This generous minimum wage reflects the city's commitment to addressing income inequality and ensuring fair compensation for its workforce.

2023 Minimum Wage Rates In The US

While each state might have tiered minimum wage requirements, Paycom reports that the standard minimum for each is:

• Alabama: $7.25
• Alaska: $10.85
• Arizona: $13.85
• Arkansas: $11.00
• California: $15.50
• Colorado: $13.65
• Connecticut: $15.00
• Delaware: $11.75
• Florida: $11.00
• Georgia: $7.25
• Hawaii: $12.00
• Idaho: $7.25
• Illinois: $13.00
• Indiana: $7.25
• Iowa: $7.25
• Kansas: $7.25
• Kentucky: $7.25
• Louisiana: $7.25
• Maine: $13.80
• Maryland: $13.25
• Massachusetts: $15.00
• Michigan: $10.10
• Minnesota: $10.59
• Mississippi: $7.25
• Missouri: $12.00
• Montana: $9.95
• Nebraska: $10.50
• Nevada: $10.50
• New Hampshire: $7.25
• New Jersey: $14.13
• New Mexico: $12.00
• New York: $14.20
• North Carolina: $7.25
• North Dakota: $7.25
• Ohio: $10.10
• Oklahoma: $7.25
• Oregon: $14.20
• Pennsylvania: $7.25
• Rhode Island: $13.00
• South Carolina: $7.25
• South Dakota: $10.80
• Tennessee: $7.25
• Texas: $7.25
• Utah: $7.25
• Vermont: $13.18
• Virginia: $12.00
• Washington: $15.75
• West Virginia: $8.75
• Wisconsin: $7.25
• Wyoming: $7.25

Again, keep in mind that these numbers do not reflect any tiered minimum wages. For instance, some states might have lower minimum wage requirements for small businesses. Or it might be completely legal for an employer to pay you less if you are a tipped employee. If you are a minimum wage worker who wants to ensure that you are being fairly compensated, take a moment to visit your state’s website to see its minimum wage requirements.

US Minimum Wage FAQs

Minimum wages can be tricky, so it’s valid to still have questions at this point.

What is the federal minimum wage rate?

The federal minimum wage is currently $7.25 for non-tipped employees, and $2.13 for tipped employees. A “tipped employee” is defined as anyone who makes more than $30 a month in tips.

Which state has a $15 an hour minimum wage?

Massachusetts, Washington, California and Connecticut are currently the only states with a minimum wage of at least $15. However, several states have made for pushes toward higher minimum wages and are tiering wage requirements, meaning wages may increase every few years until the new minimum is met.

What states have the lowest minimum wages in the US?

20 out of 50 states have a minimum wage of $7.25. Most of these states are in the south.

Can a state have multiple minimum wages?

The simple answer is yes – a state can have multiple minimum wages in place. Depending on your area, some districts have lower minimum wages for tipped employees and people who work for small businesses. Cities also have the jurisdiction to increase minimum wages if they feel the state’s minimum is not enough to live off in their area. For instance, California’s minimum wage is $15.50, but Emeryville has a minimum wage of $17.68.

The Bottom Line

Minimum wages in the United States play a vital role in ensuring fair compensation for workers and addressing the varying costs of living across different states and cities. While the federal government sets a baseline minimum wage, individual states and cities have the power to establish higher minimum wages that better reflect the economic realities faced by their workers. By exploring the top minimum wages in the U.S., we can see the efforts made to create a more equitable society where workers are adequately compensated for their labor.

As we continue to navigate discussions surrounding minimum wages, it is important to recognize the ongoing need for fair compensation and the impact it has on workers and the overall economy.

If you’re living on minimum wage and finances are tight, it’s important that you carefully watch your spending and be conscious of where your money is going. When times are tough, every penny counts, so it’s critical that you watch your budget. You can learn tips and tricks for managing your finances and maximizing your income by downloading the Rocket Money^SM app today. This app is free to use, although there are optional services, like bill negotiation, that you can opt in to for an extra cost ranging from $3 to $12 monthly.