Are minimum wage increases enough? How much do you need to live in each state
A specialized portal made an analysis on the amount of money you would need to earn to live decently in each state of the United States. In Globe Live Media we will tell you if the current wage increases are enough to reach those amounts.
In recent weeks, reports have surfaced that several U.S. states are raising the minimum wage in their jurisdiction. While that is always good news for workers in the area, they may still fall short of local cost of living needs. The high inflation of late, especially that recorded in 2022, has sapped the purchasing power of all Americans. So, we’ll take a look at how much you’d need to earn in each state to live decently.
The latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS) detailed that July 2023 inflation reached 3.2% over the past 12 months. Although it does not compare to the steady price increases recorded during 2022, which reached a 40-year high of 9.1% in June of last year, those increases are here to stay, so current purchasing power has been reduced considerably over the past two years.
Housing, food and energy are among the goods and services that, unfortunately, increased the most after the pandemic. Simply put, buying basic necessities and indulging in a few treats is becoming increasingly difficult for many Americans to afford, let alone save. A living wage would cover all of these items satisfactorily, taking into account a budgeting model known as the 50/30/20 rule.
Considering these factors, GOBankingRates researchers analyzed 2021 BLS single-person Consumer Expenditure Survey data (the latest available) to calculate the annual cost of necessities based on data from the Missouri Center for Economic Research and Information’s 2023 First Quarter Cost of Living Data Series.
To determine the living wage, experts doubled the total annual cost of these necessities to realize the other 50% that would represent discretionary spending and savings.
These are the wages you should have in each state to live comfortably (data are ordered from lowest to highest):
- Mississippi: $45,906
- Oklahoma: $46,024
- Alabama: $46,577
- Arkansas: $47,111
- Kentucky: $47,318
- Kansas: $47,379
- West Virginia: $47,732
- Missouri: $47,771
- Iowa: $48,518
- Tennessee: $48,774
- Nebraska: $49,009
- Georgia: $49,051
- Illinois: $49,372
- Wyoming: $49,666
- Indiana: $49,855
- Michigan: $50,049
- Louisiana: $50,087
- Ohio: $50,157
- Texas: $50,497
- New Mexico: $51,214
- Minnesota: $51,668
- South Dakota $52,095
- South Carolina: $52,222
- North Dakota $52,807
- Wisconsin: $53,122
- North Carolina $53,531
- Pennsylvania $53,838
- Utah: $55,293
- Delaware: $56,571
- Montana: $57,056
- Florida: $57,064
- Virginia: $57,293
- Nevada: $58,580
- Idaho: $58,634
- Colorado: $59,218
- Rhode Island: $59,936
- Arizona: $60,026
- Maine: $60,862
- New Hampshire: $62,935
- Connecticut: $63,078
- New Jersey: $64,463
- Washington: $65,640
- Oregon: $65,763
- Vermont: $65,923
- Maryland: $67,915
- Alaska: $71,570
- New York: $73,226
- California: $80,013
- Massachusetts: $87,909
- Hawaii: $112,411 dollars
As seen in the results, it stands to reason that states with higher lifestyle costs, where the benchmark for home prices tends to be exorbitant for most pockets, single people need more income to live. Median home prices are highest in Hawaii, California and Massachusetts, according to data from WorldPopulationReview.com, states where you would require a higher living wage, although only on the “Big Island” do you need six figures.
On the flip side, in Mississippi you need a living wage of less than half of what you’d need in Hawaii, just $45,906 a year. Rounding out this privileged top five are Oklahoma, Alabama, Kansas and Arkansas, all of which would require less than $47,500 per year to make a decent living in those states.
Are the minimum wage increases in the states enough to live decently?
At Globe Live Media, we have reported on some of the most recent announcements from states where they signal an increase in the minimum wage. Considering GOBankingRates’ analysis, we will tell you if these increases are really enough to be considered a living wage.
In Illinois, based on legislation passed in February 2019, the minimum wage will gradually increase to $15 per hour by 2025. If we take into account that this wage means about $31,500 dollars a year, without thinking about vacation or unpaid personal days, it would fall $18,172 dollars far below what you would require annually to live decently in the state.
Let’s go to Florida. A legislature similar to that of Illinois contemplates a phased-in minimum wage increase of $15 per hour by 2026. Of course these wage increases are nowhere near the $57,064 you would need to live well in the state, you would be $25,564 short of that.
As a final example, California will raise its minimum wage to $16 per hour by 2024. It should be remembered that the golden state is the third highest income you need to make a decent living. Although the increase is more generous than in the previous states, unfortunately, you would only reach a salary of $33,280 dollars a year, falling $46,733 dollars short of what you should be earning.
In conclusion, the state wage increases fall far short of the living wage you should be earning.