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Best and worst places to live if you're making minimum wage

I'm Sarah - wife to my amazing husband, John, and mom to two little girls, Cami and Maisie.  I used to work in the finance industry before having my daughters, and now I'm a freelance personal finance writer and blogger.  I love being wi...

Minimum wage and cost of living around the country

Have you ever wondered what it would take to live off of a minimum wage salary? Factoring in the cost of living and varying minimum wages across the U.S., we found the best and worst places to live if you’re making minimum wage.

Minimum wage and cost of living around the country

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Photo credit: Michael Jester/Wikimedia

According to the U.S. Bureau of Labor Statistics, 1.6 million Americans earned the federal minimum wage of $7.25. An additional 2 million Americans earned less than the federal minimum wage, which together accounts for 4.7 percent of all hourly paid workers.

States with the highest minimum wages

The state of Washington currently ranks number one for highest minimum wage at $9.32 per hour as of 2014. Other states with above-average minimum wages include Oregon at $9.10 per hour; Vermont at $8.73 per hour; Connecticut at $8.70 per hour; Illinois, New Jersey and Nevada at $8.25 per hour; and Colorado, California, Massachusetts, Rhode Island and New York at $8.00 per hour. But just because the hourly pay may be higher than the federal minimum wage doesn’t mean you won’t be spending all your money on rent.

To see where your state stands, click here


States with the lowest minimum wages

Almost all states in the Southeast region of the U.S. pay minimum wage with the exception of Florida, which pays $7.93 per hour. Utah, Idaho, Texas, Oklahoma, New Hampshire, Pennsylvania and most of the states in the Midwest also pay the federal minimum wage rate of $7.25 per hour.

According to USA Today, four states have a state minimum wage level below the federal minimum wage level: Arkansas, Georgia, Minnesota and Wyoming. By law, though, the states must pay whichever minimum wage rate is higher. Like anything, of course, there are exceptions to the rule.

Comparing cost of living with minimum wage

More so than what you make is where you live. If you’re making minimum wage in San Jose, California, for example, it’s going to be much harder to get by than if you were to live in a city with a lower cost of living, such as Oxford, Mississippi.

States with the highest cost of living include Hawaii, where the average home costs more than $400,000, New York, Connecticut, Alaska, California, New Jersey, Massachusetts and Oregon. While their minimum wage rates are above the federal guideline, if housing and groceries cost you twice as much than in a less expensive state, you’ll have a much harder time surviving than if you were to live in a cheaper area.

States with the lowest cost of living, not surprisingly, include Mississippi, which is ranked number one, Tennessee, Idaho, Oklahoma, Utah, Arkansas, Kentucky and Michigan. These states all pay the federal minimum wage of $7.25 or slightly higher. The median home value in Mississippi, though, is $112,000, so even if you could be making $8.00 an hour in New York, you can stretch your dollars much farther in a less expensive state.

The best state to live in if you’re making minimum wage

Based on cost of living and state minimum wage rates, the most affordable place to live in the U.S. is the state of Washington, according to Forbes Magazine. The state’s cost of living is only 2.5 percent higher than the national average, whereas other states that offer higher paying jobs cost 20 percent more. Washington also does not have a state tax, so those that are making minimum wage get to keep more of their checks for living expenses.

Choosing a state with a booming economy will also help your chances of making a salary above the federal or state minimum wage. The average salary in Washington is more than $50,000 per year, giving those that do make minimum wage the chance to move up in their careers and provide them and their families with a better way of life. Smaller towns, such as those in Mississippi or Idaho, may not provide you with the economic means that it would take to make more money.

Of course, when deciding where to live, other factors outside of wages and cost of living should be factored in, too. Do you like the climate? What types of outdoor activities do you enjoy? Do you prefer cultural events or nature? Where does your family live?

Tell us: Could you survive in your state making minimum wage? Share in the comments below!


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