Eight States With the Highest Minimum Wages

Alexander, Thomas C. Frohlich

8. Massachusetts
> Minimum wage: $8.00 (tied for 7th highest)
> Poverty rate: 11.9% (11th lowest)
> Union participation: 14.3% (12th highest)
> Cost of living: 8th highest

Unlike the many states that tie minimum wages to inflation to ensure earnings keep up with living costs, in Massachusetts the minimum wage has not changed since 2008. The cost of living in Massachusetts is hardly low. Overall, the state is one of the most expensive places to live in the country. The cost of health care, for example, is higher than in every state except for Alaska. That burden, however, may not be felt as much by the state’s population because more than 95% of residents are covered by health insurance, the most in the nation. Other high costs may still be affordable for many living in Massachusetts. Median household income last year was among the highest in the United States, at $65,339. Union participation in the state is especially strong. Roughly 64% of public workers are union members, trailing only New York.

7. California
> Minimum wage: $8.00 (tied for 7th highest)
> Poverty rate: 17.0% (18th highest)
> Union participation: 17.2% (6th highest)
> Cost of living: 6th highest

California’s minimum wage of $8 per hour is tied with Massachusetts as the seventh highest in the nation. This should change, as California’s legislature recently approved plans to increase the state’s minimum wage to $9 per hour next year and to $10 per hour by 2016, higher than any other state. The state is among the nation’s most expensive, especially due to the high cost of housing, which trails only Hawaii and New York, according to MERIC. While California’s poverty rate was just 18th highest among the 50 states, poverty remains an issue. When extending poverty measures to take into account families and individuals that are not reflected in standard poverty rates, California had the nation’s highest “supplemental poverty measure” from 2010 and 2012, at 23.8% versus 16% nationally, according to a recent report from the Census Bureau.

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6. Nevada
> Minimum wage: $8.25 (tied for 4th highest)
> Poverty rate: 16.4% (19th highest)
> Union participation: 14.8% (10th highest)
> Cost of living: 24th lowest

Workers in Nevada must either be paid $8.25 an hour, or the federal minimum wage of $7.25 an hour if they receive health benefits. Nevada also indexes its minimum wage to annual changes in inflation or the federal minimum wage, whichever increases by more. But because the federal minimum was raised in 2009, the state has not increased its minimum wage in recent years. Still, the state’s minimum wage remains among the nation’s highest. Nearly 15% of the state’s workers, including 11.1% of the state’s private workers, were union members last year, 10th and fourth highest nationwide, respectively.

5. Illinois
> Minimum wage: $8.25 (tied for 4th highest)
> Poverty rate: 14.7% (24th lowest)
> Union participation: 14.6% (11th highest)
> Cost of living: 21st lowest

Overall, it is cheaper to live in Illinois than most other states. The state’s minimum wage is the highest in the Midwest at $8.25, tied with Nevada and Connecticut. Even so, Governor Pat Quinn has advocated raising the minimum wage to $10 per hour. In some sectors, union membership may be strong enough to improve working conditions without the government. For example, nearly 40% of private construction workers are union members, by far the most compared to other states. Despite the well-being suggested by the relatively low cost of living and the high wages — typical Illinois households earn more than the national median — the state still faces challenges. As of October, the state’s 8.9% unemployment rate was one of the highest in the country.