Buzz
California made waves in the wage-worker sector by introducing a new $20 minimum hourly wage for fast food workers this year. The change has led major companies like McDonald's and Pizza Hut to reduce staff and increase prices.
While corporations may not be thrilled, state laws are increasingly raising minimum wages to address the growing gap between service industry pay and the soaring cost of living. (At the federal level, the minimum wage remains unchanged at $7.25, where it has been since 2009.)
Recently, financial platform Visual Capitalist compiled a list of 11 states—and one district—that now feature the highest minimum wages. These regions pay at least $14 an hour, nearly double the federal minimum. Here's the breakdown:
- District of Columbia // $17
- Washington // $16.28
- California // $16
- Connecticut // $15.69
- New Jersey // $15.13
- Maryland // $15
- New York // $15
- Massachusetts // $15
- Colorado // $14.42
- Arizona // $14.35
- Oregon // $14.20
- Maine // $14.15
The District of Columbia currently leads with a $17.50 minimum hourly wage, the highest in the nation. (This rate will take effect on July 1, 2024; it’s $17 until then.) The district is also improving conditions for tipped workers, setting a new minimum of $10 an hour starting in July, up from $8.
Washington tops the states with a $16.28 minimum wage, followed closely by California at $16. However, these wages may soon be surpassed: Hawaii plans to increase its minimum wage from $14 to $18 by 2028.
Cities, like states, have the ability to raise their minimum wages. In the Portland, Oregon metro area, the hourly wage stands at $15.45 (in rural areas, it's $13.20). While Washington leads overall, specific cities can offer higher pay: Seattle pays $19.97 per hour, and Tukwila requires companies with 500 or more employees to pay $20.29—currently the highest in the country.
While many states take proactive steps to address affordability, others fall short. According to the National Conference of State Legislatures, five states—Alabama, Louisiana, Mississippi, South Carolina, and Tennessee—do not have a state-set minimum wage and default to the federal rate. Two states, Wyoming and Georgia, set their minimum wage below $7.25, though federal law prevails. In Georgia, employees not covered by the Fair Labor Standards Act earn just $5.15 per hour.
Wages alone don’t tell the whole story when considering the cost of living. While these states offer some of the highest wages for workers, they often rank high in terms of living costs as well. Only Arizona and Maine land in the middle of the affordability rankings, coming in at 29 and 30 according to the U.S. News and World Report. Mississippi, the most affordable state, sticks to the federal minimum wage.
California’s law for fast food workers is often viewed as an example of how companies might shift the cost of wage increases to consumers. However, In-N-Out president Lynsi Snyder recently countered this argument, promising that the company would not significantly raise prices.
