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6 states where the minimum wage and cost of living offer the best bang for your buck

The highest state minimum wage in the U.S. is now $16.28 per hour, but some cities are even higher.

Map via Wikimedia Commons (multiple creators)

State minimum wages range from $7.25/hr to $17.00/hr in 2024.

Public discourse about minimum wage and living wages has been ongoing for years, with people debating whether the government should mandate a minimum hourly pay for workers.

President Franklin D. Roosevelt signed the first federal minimum wage law in 1938, setting the lowest wage a worker could be paid at 25 cents per hour. Nearly a century later, the federal minimum wage is $7.25/hr, holding steady since 2009, with people lobbying to raise it to at least $15/hr for over a decade. However, in addition to federal law, each state has its own laws, a handful of which establish a state minimum wage higher than $15, a handful of which don't have a set minimum wage at all and everything in between.

Cost of living has also been a hot topic as inflation has squeezed everyone's wallets and certain cities and states have become utterly unaffordable, especially for people in low-wage jobs or who who are just starting out in their careers. So how do minimum wage and cost of living correlate state-by-state? Are there any sweet spots with a high(er) minimum wage and low(er) cost of living?

While there’s no perfect storm of super low cost of living and super high minimum wage—for instance, Washington, D.C. has the highest state minimum wage at $17/hr, but housing costs 140% more than the national average—there are some states where the ratio is far more favorable than others. According to Insider Monkey, here are the top six states where you can get the most bang for your minimum wage buck.

6. New Mexico

The Land of Enchantment offers a relatively decent living for its $12/hr minimum wage thanks to the state's below average cost of living. According to Rent Cafe, housing in New Mexico is 8% lower than the national average, monthly utilities are 9% lower, food is 4% lower, transportation is 3% lower and healthcare, goods and services are 2% lower.

According to Smart Asset, Albuquerque, New Mexico ranks as No. 10 in U.S. cities where minimum wage goes the furthest.

5. New Jersey

The Garden State's relatively higher-than-average cost of living is counteracted by relatively solid minimum wage of $14.13/hr. Most of the cost of living in New Jersey is wrapped up in housing, which is 30% higher than the national average, according to Rent Cafe, and utilities, which are 12% higher. Goods and services are 5% higher, but healthcare is 2% lower than the national average. Food and transportation are 1% and 2% higher, respectively.

4. Connecticut

With both a cost of living and minimum wage slightly higher than New Jersey, Connecticut rolls in at No. 4 with a $15/hr minimum wage. Where the Constitution State hits hardest is in utilities, which Rent Cafe places at 30% higher than the national average, and housing, which is 24% higher. Healthcare and goods and services are both 9% higher, while transportation and food are just 1% and 2% above average.

3. Missouri

The Show-Me State says, "Show me the money!" with its somewhat respectable $12/hr minimum wage, which goes pretty far with its relatively low cost of living. Housing is the biggest cost benefit Missouri offers at 18% lower than the national average. But utilities, food, healthcare, and goods and services are also all below average, with only transportation landing right at the national average.

Additionally, St. Louis clocked in at No. 5 for a minimum wage real-world value of $13.68 when adjusting for the city's lower-than-average cost of living.

2. Washington

With the highest state minimum wage in the nation (unless you count Washington, D.C.), Washington's $16.48/hr puts it in second place when accounting for cost of living. Make no mistake, Washington isn't cheap overall, with a cost of living 15% higher than the national average. Housing and transportation hit hard at 29% and 27% higher than the national average, respectively. Healthcare is pricey as well at 20% higher than average. Food costs 12% more, but utilities clock in at 7% less than the national average.

Two cities in Washington hit the top 15 for highest real minimum wage value, though, with Seattle at No. 13 and Spokane at No. 2.

map of united states with these states highlighted in green: Washington, New Mexico, Missouri, Illinois, New Jersey and Connecticut

These six states offer the best minimum wage to cost of living ratio.

Created with mapchart.net

1. Illinois

If you want the best bang for your minimum wage buck, head to the Prairie State with its $13/hr minimum wage and 8% lower than average cost of living. Housing in Illinois is 22% lower than average and utilities are 10% lower. The only expense that comes in higher than average for Illinois is transportation at 3% above average, which isn't enough to keep it out of the top spot.

However, there are some minimum wage sweet spots in certain U.S. cities that aren't reflected in these state rankings. According to Smart Asset, Denver, CO, is the city where minimum wage goes the farthest in the nation. Colorado comes in at a respectable 7th place in state minimum-wage-to-cost-of-living ratio, but Denver has its own mandatory minimum wage of $18.29/hr.

A citywide minimum wage is part of what puts Seattle at the No. 13 spot on that same list. Seattle is one of the most expensive cities in the U.S., but its $19.97 minimum wage for most workers changes the ratio in its favor.

Other cities in the top 10 include Buffalo, NY; Minneapolis, MN; Tucson, AZ; St. Paul, MN; Phoenix, AZ and Stockton, CA.

The minimum wage conversation may vary widely across the U.S., with different costs of living and different state laws on the books. But if you're looking to move someplace where your wage will go the furthest, these six states will likely be your best bet to check out first.

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The inspirational journey of one child care worker and her Fight for $15.

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Child care workers across America are a part of the Fight for $15 to demand higher wages.

Why?

Because the current system makes it difficult for the people caring for our children to be able to care for their own.

The Fight for $15 rally in New York City. Image via The All-Nite Images/Flickr.

Betty Henderson knows all about this.

Betty Henderson at a Child Care and Development Block Grant hearing in Lansing, Michigan, calling for more funding for child care. Image via Betty Henderson, used with permission.

Henderson's been a child care provider for 16 years. Last year, she opened her own child care center, Angels of Essence. She has three teachers working for her, but because of a lack of funding, she can only pay them $9 an hour — despite them having degrees and being extremely deserving.

Most of the people who rely on Betty's team to care for their kids pay for child care through the Child Care and Development Block Grant (CCDBG), the federal program that's primarily responsible for funding state child care assistance programs like Michigan's Child Development and Care subsidy. But the rate the state of Michigan pays out for this service is often too low to cover the cost of care and overhead. As owner and director of Angels of Essence, Henderson could charge the parents a copay, but they can't afford it and child care is a necessity.

Soshe places the needs of others above her own— even if that means her hourly rate dipping to $2.58 from time to time. She knows in her heart, though, that the work she does is incredibly important to a child's development.

"It's not only rewarding, it's beneficial. Not only to parents, but to the children," said Henderson. "We watch these kids 10 to 12 to 14 hours per day. We see them, we care for them, we love them, but yet what we get paid is very very minimal.

The teachers of Angels of Essence and their students. Image via Betty Henderson, used with permission.

The challenges Henderson faces affect other important aspects of her life.

She's not able to address her health challenges because she isn't provided with any medical benefits. And even if she were to pay the cost on her own, she can't afford to take time off work. It's a heartbreaking dilemma that extends to her education and day-to-day operations.

"There're certain educational requirements that have to be met for the state of Michigan in order to run a center and to continue to operate a center," said Henderson. "That within itself is another heavy financial burden because there’s money that's just not there to do that. But yet it has to be done or my center can be closed down."

Despite the hurdles, Henderson won't be stopped.

Betty Henderson at a press conference held in front of Angels of Essence. Image via Betty Henderson, used with permission.

Henderson has been all over the U.S., attending rallies and conventions and joining her fellow fighters in their pursuit of a better livelihood. She's rallying for a livable wage for herself, her workers, and everyone in the same position. She's seen the good that can be achieved and knows that the movement's goals are very much on the horizon.

"We're just going to keep fighting until we get it done all over the map," said Henderson. "Even when Michigan gets it, that's still not a reason for me to just stop because now we finally have it. I'll keep fighting until all the states have their minimum wage."

No doubt the community and camaraderie has made their collective voices stronger than ever.

Reflecting on a rally held at Angels of Essence, Henderson talks about the beauty of people coming together for a common cause:

"The health care workers were here. The fast food workers were here. The airport workers were here. It's unity! And even though it's not a union, we still unite together because we're all fighting for the same thing."

No doubt this is what's right. Image via The All-Nite Images/Flickr.

It's not just the workers who have something at stake.

Think about kids learning new developmental skills because they had the proper resources. Or the parents who are able to work more efficiently, knowing their children are in good hands. In fact, just think about the future generations of this country.

Said Henderson: "Even though I've been doing this for a while and I'm 45 years old, I’m still caring for my son's future and my granddaughter's future, so it's not just about us. It's about the ones under us as well, so we need everyone to join together and be a part of this fight."

No matter the industry, the Fight for $15 is about people and their right to make a living wage — for themselves and their families. And working together is the only way we'll get there.

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They pour their hearts into caring for others, but many can barely support their families.

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"I know that a lot of the children, they’re starving by the time they get to my home in the morning. And a lot of times, you can just see it. They’re weak. And you can look at the parents and you can see that they’re weak. I sacrifice my groceries, I sacrifice water, sometimes I have clothing from other children ... sometimes I’ll sneak them into the bag. There have been times when I've gone to the Salvation Army if I had extra money and I know that there was a child in need."

Nicole Small, a child care worker in Detroit shared the above story. This is her reality. And she's not alone.

You see, there are people who love their jobs. I mean really love their jobs.

Their work makes them feel fulfilled. It makes them feel purposeful. They're giving back to their community. They're helping people who actually cannot help themselves. They're shaping the minds of young children whose parents are struggling to put food on the table. They are their client's backbone. They hold them up and keep them strong as life throws challenges their way. They're proud of what they do.

But they go home after spending eight or more hours at work and often can't afford to put food on their own tables.

Nicole Small, a child care worker in Detroit. All photos via SEIU, used with permission.

Many times, they have no savings, no chance for retirement. Often they can't afford to own a car, and if it's a necessity they can't get away from, they can't afford gas. Still, they refuse to feel hopeless.

This is a reality for so many child care and home care workers in this country.

They work hard every day, doing jobs that are absolutely necessary — in many cases saving lives. But they can't support themselves. They make such a low wage that basics like socks need to be budgeted for. They're on public assistance and are barely scraping by. And many of us don't know about it. But as leaders in the Fight for 15 movement, they're making their voices heard and sharing their stories.

Home care and child care  workers at a Fight for $15 rally.

Many care workers struggle every day to make ends meet:

Nicole (child care)

"To be honest with you, it’s hard not to [survive]. When you’re looking at those children, it’s hard not to. I don’t know, you just kick into survival mode ... it’s just a part of your everyday life. Does it get exhausting? Are you tired? Absolutely. But what are you going to do when you have children here and you know that they need you."

Melissa Benjamin (home care)

"As a woman and working in home care, I have found myself completely dependent on my husband for everything. Even gas to get to my job. Because my job doesn’t pay a wage where I can support that. And so it creates this co-dependency on other people ... and there’s not a lot of dignity in that."

Melissa Benjamin, a home care worker in Colorado.

And as they fight for fair wages and a voice on the job, they’re worried that people don’t understand their struggle.

Denise Major (home care)

"You’re going to do work above and beyond the call of duty anyways simply because that’s someone that you love and you care about. ... It’s like you’re working but you’re still in poverty. And you’re working long hours and you’re working alone."

Denise Major, a home care worker in Pennsylvania.

Patricia Walker (home care)

"Everybody can’t do it. ... It takes a special person to go into somebody’s home and take care of them and give them that love and attention."

Sepia Coleman (home care)

"We are invisible. We’re not appreciated. We’re totally disrespected. And we have more financial struggles than time allows. We are literally the lowest paid people in our field, with the population of people that we work with."

Pavonne Scott (child care)

"We work so hard, tirelessly with the children, and then we can’t come home and pay our own bills. You’re giving so much and every day that you give goes straight to the bills. And that has been the biggest challenge."

Home care and child care  workers at a Fight for $15 rally.

Melissa (home care)

"I wish people knew that it requires skill. A lot of people will say, 'Well, it’s just home care; you’re just like a babysitter. Why would you need a fair wage for that? All you’re doing is cooking and cleaning.' But no, there’s more that goes into it than that. There’s a lot more that goes into it."

Still, they show up for work every day, in spite of the challenges, because they love their jobs and know how vital they are.

Patricia (home care)

"I love what I do. I love my people. I don’t call them clients anymore because I’ve been with them for a minute. So they’re like my family. ... I want to be involved with them and I just love what I do. That’s the only way I can say it. I love what I do."

Pavonne (child care)

"The children need teaching. The children are our future ... it’s a heavy responsibility."

Pavonne Scott, a child care worker in Florida.

Melissa (home care)

"I’m a caregiver. I know people need care, and it’s what I do. And also, I like home care because I find that people are happier in their homes. When they’re in their homes, they feel secure and valued and comfortable. Knowing that there’s a need for that has kept me in it."

Nicole (child care)

"If you really care about the children, the quality of their education and the quality of their life, that’s what you do. You just jump in, and you help out in any area that you can."

Sepia (home care)

"I know that I am doing a good service to someone who is in need of care. And I know that one day, it could be me ... that’s what keeps me motivated and keeps me going."

Sepia Coleman, a home care worker in Tennessee.

And they’re fighting for $15 and a union because it gives them hope that better days are around the corner.

Denise (home care)

"I know I have a voice now. I know I no longer have to suffer in silence, and I can help other home care workers to kind of help them help themselves. ... We have a unique situation because we all work in separate places, so we rarely ever congregate unless it’s a rally or something like that. ... So I just want to let other home care workers know that we’re not alone. ... We have a voice and we can call each other. And we can kind of feel like we’re not on an island by ourselves and feeling stuck and helpless."

Sepia (home care)

"Everybody that has a job should have dignity and respect ... every job is not for everybody. But if the job is done in the best of performing, please show that person that you appreciate them. Don’t have a person working for your company eight or nine, 10 years, and they have to come and beg you for the compensation of a raise. It’s not fair to them. We’re not slaves, we’re people."

Patricia (home care)

"I ride the bus to my clients every day. I can’t afford a car. It’s very important to me that no one that’s coming up after me has to go through what I’m going through. Or what I’ve been through."

Patricia Walker, a home care worker in Florida.

Nicole (child care)

"It means that our children will be able to be more competitive when they go to a standard school like kindergarten or middle school ... they’ll have a better education and they’ll have a better quality of life. That’s what it means to me for the children. And what it means to me for myself? It means that I can give them more."

Melissa (home care)

"That’s what this movement is about. It’s about dignity. Giving dignity to the home care workers and the client."

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There are mothers with full-time jobs who go hungry in order to feed their kids.

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It can be easy to forget that real people lie at the center of every movement.

From the fight for religious freedom to the ongoing struggles for racial, gender, and socioeconomic equality, these movements are carried by regular people: mothers, fathers, sisters, brothers, and friends who are working every day to make their voices heard.

The Fight for $15 is no different. It's about people fighting to survive.

Take, for instance, Adriana, a mother who has worked at McDonald's for five years.


Adriana's take-home pay for one two-week, full-time pay period was $508.38.

And like all of us, she has bills to pay.

She pays $100 per week in childcare for her son. Heat and water cost her $300 per month, and her rent is $500. With expenses for just those necessities already exceeding more than twice what she brought home for that two-week pay period — how is she supposed to pay for groceries? Emergency medical care? Internet so that her son can get his homework done? It's almost impossible.

What are workers supposed to do when they're working 40+ hours per week, doing necessary jobs, only to find that they're unable to make ends meet?

The minimum wage in the U.S. varies state by state; as of May 2016, it ranges from $7.25 to $10.50 per hour (with D.C. set to bump up to $11.50 on July 1). While some states do have slight increases scheduled years away, the sad reality is that with cost of living on the rise, it's still not enough to be a livable wage. So what does that mean?

There are veterans with full-time jobs who can't afford food.

There are parents who can only feed their kids if they themselves don't eat.

Or who give up everything so that their kids don't have to.

The people fighting for $15 work hard. They make multibillion-dollar corporations those billions of dollars.

Now, they're just asking to be compensated for it and for the freedom to form a union so they can get a seat at the table with the corporate CEOs who make so many decisions that affect their lives. They're fighting for their families and better pay so they can put money back into their neighborhoods. So they can strengthen and boost their local economy.

There's a long way to go, but the tides are turning.

New York and California have agreed to the $15 minimum wage. Thousands of workers in Pennsylvania are seeing their wages increase to $15 an hour. And the more these stories are heard, the stronger the voices of the thousands of people who are fighting for nothing more than the ability to survive can become.

If enough people stand behind them and share their stories, corporations will have no choice but to listen.

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