The Eight States With The Highest Minimum Wages

The highest rate in almost 30 years, nearly one and six Americans lived in poverty last year, according to recently released data from the U.S. Census Bureau. Many states choose to combat poverty rates by increasing the minimum wage. As of this year, 18 states have set a minimum wage higher than the federal minimum of $7.25 per hour, according to the National Employment Law Project (NELP). 24/7 Wall St. examined the eight states with minimum wages of $8.00 or more – at least 10% higher than the federal mandate.

Read: The Eight States With The Highest Minimum Wages

In 2007, the national minimum wage was increased for the first time in a decade, from $5.15 to $5.75. Over the next three years, the federal minimum wage increased each year until 2009, when it hit its current rate of $7.25. NELP reports that eight states will likely raise their rates again in 2012. Washington will become the first state to have a minimum wage above $9.00, though most states will continue to have a minimum wage below $8 per hour.

The states with the highest minimum wages are primarily in New England and on the West coast. They “tend to be those with very high costs of living, or those that allow ballot initiatives — which enable the voters to cut through gridlock and raise the minimum wage on their own,” Paul Sonn, Legal Co-Director of NELP, told 24/7 Wall St. in an email.

Nearly all of states have particularly strong union representation, the kind of motivating force that gets minimum wage legislation passed, according NELP. High cost of living appears to be another driving force for an increased minimum wage. Six of the eight states on the list have among the fifteen highest costs of living in the country.

24/7 Wall St. reviewed minimum wage data by state from NELP to identify the eight states with the highest minimum wage. Median household income values from the U.S. Census Bureau and union membership rates from the Bureau of Labor Statistics was also reviewed. Cost of living data was obtained from the Missouri Department of Economic Development.

These are the states with the highest minimum wage.

8. California
> Minimum wage: $8.00
> Pct. of workers in unions: 17.5% (5th highest)
> Cost of living: 6th highest
> Median household income: $54,459 (14th highest)

On January 1, 2008, California’s minimum wage increased to $8.00, up from $7.50 the previous year. Ten years prior, in 1998, the state’s minimum wage was just $5.15. A bill has been proposed in the state legislature, which would not only raise the minimum wage to $8.50, but would implement automatic increases each year, based on the state’s consumer price index. According to the Missouri Department of Economic Development, California has the sixth highest cost of living in the country.

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7. Massachusetts
> Minimum wage: $8.00
> Pct. of workers in unions: 14.5% (16th highest)
> Cost of living: 2nd highest
> Median household income: $61,333 (5th highest)

Massachusetts has had a minimum wage of $8.00 since 2008. In March, legislation was introduced to increase the minimum wage to $10.00 by 2013, and the status of that bill is unclear. According to the Missouri Department of Economic Development, the state is has one of the highest costs of living in the country. Massachusetts also has the fifth highest median household income in the country.

6. Vermont
> Minimum wage: $8.15
> Pct. of workers in unions: 11.8% (20th highest)
> Cost of living: 9th highest
> Median household income: $55,942 (12th highest)

“Vermont’s minimum wage increases at the same rate as the Consumer Price Index (CPI) for the preceding year,” the state’s Department of Labor announced. Most recently, on January 1, 2011 this resulted in an increase of 1.1% from $8.06 per hour to $8.15 per hour. Vermont has historically had a high minimum wage, although a decade ago, in 2001, it was almost two dollars less, at $6.25. The state is expected to announce a rate increase in the next few weeks.

5. Connecticut
> Minimum wage: $8.25
> Pct. of workers in unions: 16.7% (7th highest)
> Cost of living: 3rd highest
> Median household income: $66,452 (2nd highest)

With a median household income of $66,452 in 2010, Connecticut is one of the wealthiest states in the country. The state’s minimum wage of $8.25 is among the top five highest minimum wages in the country. In 2006, when the federal minimum wage was still just $5.15, Connecticut increased its to $7.40, which was at the time the third highest minimum wage in the country.

4. Illinois
> Minimum wage: $8.25
> Pct. of workers in unions: 15.5% (12th highest)
> Cost of living: 17th lowest
> Median household income: $50,761 (21st highest)

Illinois’ minimum wage has historically increased along with the federal rate, until 2004, when the state’s wage was raised to $5.50 per hour, ahead of the national rate of $5.15. The next year, Illinois’ minimum wage increased an entire dollar per hour, and then another dollar in 2008. The minimum wage was raised $0.25 each year since. This year, lawmakers have introduced legislation to raise the minimum wage again, as well as add an annual cost of living adjustment.

3. Nevada
> Minimum wage: $8.25
> Pct. of workers in unions: 15% (13th highest)
> Cost of living: 20th lowest
> Median household income: $51,525 (19th highest)

Nevada’s minimum wage is $8.25 per hour for those without employer-provided health insurance. For those with insurance, it is only $7.25 — the same as the federal rate. Before 2009, there was no such distinction. Before that year, Nevada also did not have an exceptionally high minimum wage. In 2007, for example, Nevada’s minimum wage was only $6.15 per hour, much lower than Connecticut’s minimum wage at the time of $7.65. Connecticut’s minimum wage now is also $8.25 per hour.

2. Oregon
> Minimum wage:  $8.50
> Pct. of workers in unions: 16.2% (10th highest)
> Cost of living: 14th highest
> Median household income: $50,526 (22nd highest)

Oregon’s minimum wage is currently the second highest in the country. It will increase by $0.30 in 2012, which is three times as much as it has increased between 2010 and 2011. The state has been one of the top-paying states for low-wage earners for many years now. In 2000, its minimum wage was $6.50 per hour. This was the highest minimum wage in the country and was only matched by Washington.

1. Washington
> Minimum wage: $8.67
> Pct. of workers in unions: 19.4% (4th highest)
> Cost of living: 15h highest
> Median household income: $56,253 (11th highest)

Washington’s minimum wage of $8.67 per hour is the highest in the country. It is significantly more than the federal rate of $7.25. The state has also announced that it will be increasing its minimum wage by $0.37 in 2012, the largest raise announced by any state at this time. This will increase the state’s minimum wage to $9.04 per hour, making Washington the first state to legally require employers to pay their employees more than $9 per hour.

Michael B. Sauter