Eight States With the Highest Minimum Wages

Alexander, Thomas C. Frohlich

4. Connecticut
> Minimum wage: $8.25 (tied for 4th highest)
> Poverty rate: 10.7% (4th lowest)
> Union participation: 14.0% (14th highest)
> Cost of living: 4th highest

In May, the Connecticut House passed a bill to increase the state’s minimum wage to $9 per hour by 2015. Governor Dan Malloy noted the bill would make life “easier for working people in [the] state without adversely impacting the business community.” However, as of the third quarter of this year, Connecticut was still one of the most expensive states in the nation to live. The state ranked at least sixth highest in every major component factored into the cost of living, including ranking fourth highest for groceries and second highest for transportation, according to MERIC. Income inequality in the state also remains extreme. Last year, only New York had a higher Gini coefficient than Connecticut — the coefficient measures income distribution. The wealthiest 5% of Connecticut households accounted for 24.6% of all state earnings as of 2012, more than in any other state.

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3. Vermont
> Minimum wage: $8.60
> Poverty rate: 11.8% (10th lowest)
> Union participation: 10.7% (21st highest)
> Cost of living: 9th highest

Minimum wage is $8.60 per hour in Vermont, the third highest in the nation. While a typical Vermont household income was higher than in most states last year, earnings do not go as far. The state’s fuel and food costs are among the highest in the nation. The minimum wage rate in Vermont is partly determined by inflation, as calculated by the consumer price index. The state labor department recalculates the appropriate wage every year. This year, the minimum wage is scheduled to increase by 13 cents to $8.73 an hour. As is usually the case nationwide, poverty in Vermont has been worse in urban areas. In Burlington, the state’s largest city, the city council implemented a livable wage ordinance in 2001. The ordinance set a minimum pay of $17.71 per hour when health insurance is not offered and $13.94 an hour when it is. Last year, less than 12% of households lived below the poverty line and only 6.5% of residents lacked health insurance, both among the best rates in the nation.

2. Oregon
> Minimum wage: $8.95
> Poverty rate: 17.2% (15th highest)
> Union participation: 15.8% (9th highest)
> Cost of living: 13th highest

Despite having the nation’s second highest minimum wage, take-home incomes in Oregon may be inadequate for many state residents. Median household income was lower than the national rate in 2012, at $49,161. More than one in five households relied on food stamps last year, the highest proportion in the country. Additionally, despite having a higher cost of living than the country as a whole, the state’s median income was just over $49,000, more than $2,000 less than the national median income. Soon, however, workers earning minimum wage can expect a moderate improvement. Starting January 1, 2014, the minimum wage will increase by 15 cents to $9.10 per hour. With the increase, minimum wage employees working 30 hours a week will earn an additional $234 annually, according to the state’s Bureau of Labor and Industries.

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1. Washington
> Minimum wage: $9.19
> Poverty rate: 13.5% (19th lowest)
> Union participation: 18.5% (4th highest)
> Cost of living: 15th highest

Washington has the highest minimum wage in the nation at $9.19 per hour. Recently, state officials certified a vote in favor of Proposition 1, the ballot measure to implement a $15 wage floor in the city of SeaTac. The new law, if passed, will affect roughly 6,000 airport and hotel employees in SeaTac, Washington. Union activity is strong in Washington, with 18.5% of the state’s workforce active union members, more than all but three other states. Union membership among those working in the manufacturing sector is the highest out of every state. Washington is also among America’s wealthier states, with a median household income of $57,573 as of 2012, versus a national median of $51,371.