In this article, we look at the top 5 states with the highest minimum wage rates and low cost of living. You can read about companies that are raising wage levels and its impact on business and employee retention by heading over to our article, 20 States with Highest Minimum Wage and Low Cost of Living, where we have also shed light on a protest in 2012 that sparked the Fight for $15 movement.
5. New Jersey
Minimum Wage: $14.13
Cost of Living Index: 110.3
Score: 0.1281
While New Jersey’s cost of living is only slightly higher than the national average, its minimum wage level is almost double that of the federal minimum hourly wage rate. According to the New Jersey Department of Labor and Workforce Development, minimum wage will be increased to total $15.13 starting January 2024.
4. Connecticut
Minimum Wage: $15
Cost of Living Index: 113.9
Score: 0.1317
Connecticut is one of the richest states in the US, and it comes as no surprise that it has the third highest minimum wage rate in the country. In September 2023, Governor Ned Lamont announced to increase the hourly rate to $15.69 starting January 1, 2024. This will be Connecticut’s first-ever automatic wage adjustment after it was tied to inflation rates.
3. Missouri
Minimum Wage: $12
Cost of Living Index: 88.3
Score: 0.1359
Missouri has one of the cheapest costs of housing in the United States. Transportation expenses also remain 12% lower than in other parts of the nation. Missouri voted for a law, according to which the wage rate increased by 85 cents each year between 2018 and 2023, because of which the wage rates rose from $7.85 per hour to the current $12 in this short span of time. Next year in 2024, the wage rate will be adjusted in proportion to the Consumers Price Index.
2. Washington
Minimum Wage: $15.74
Cost of Living Index: 115.7
Score: 0.1360
According to the US Department of Labor, Washington has the highest minimum wage rate among all states in the nation. The hourly rate is set to rise further in 2024 to total $16.28, which could mean a full-time worker earning as much as $34,000 per annum. The adjustment to the minimum wage rate is being made due to a 3.3% increase in cost of living in the state. There are three cities in Washington that pay more than the state average. These are SeaTac ($19.06), Tukwila ($18.99), and Seattle ($18.69).
1. Illinois
Minimum Wage: $13
Cost of Living Index: 91.8
Score: 0.1416
Illinois tops the charts for states where high minimum wage rates cover the challenges associated with rising cost of living the most compared to other states in the nation. The state government plans to raise wage rates in Illinois by $1 per annum over the next two years, after which the hourly wage rate in the state will touch $15 by 2025.
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