It’s Bad Credit Education Month at OppU. Click Here to Learn More!
The 10 States with the Highest Minimum Wages in 2021
Since July 2009, the federal minimum wage for workers has been $7.25. In 2019, about 392,000 people earned the federal minimum wage, while approximately 1.2 million people earned less, according to the U.S. Bureau of Labor Statistics (a branch of the U.S. Department of Labor).
Depending on your state, you could be earning more than that though. Many states, cities, and localities have their own minimum wage laws.
In states where employers are subject to state and federal minimum wage laws, employees earn the higher of the two wages. For example, as of January 1, 2021, if you worked a minimum wage job for an employer in Illinois, you’d earn $11 per hour instead of the federal minimum wage of $7.25.
Not every state has a minimum wage law. Alabama, Louisiana, Mississippi, South Carolina, and Tennessee don’t have state minimum wage laws. Instead, they’ve adopted the federal minimum wage of $7.25. In addition, in 2019, three of these states (South Carolina, Louisiana, and Mississippi) had the highest percentages of hourly-paid workers earning at or below the minimum wage, according to the Bureau of Labor Statistics.
States that pay less than the federal minimum wage
Georgia and Wyoming are the only states that do not have state-level minimum wages. Both states have a minimum wage of $5.15 on their books.
But how is it possible for someone to earn less than the national minimum wage?
Generally, wage workers in Wyoming and Georgia do earn the federal minimum wage of $7.25, but there are a few exceptions for employers who don’t fall under the Fair Labor Standards Act (FLSA). However, most small and large employers fall under the FLSA, so most workers in these two states earn at least $7.25 an hour.
What’s the minimum wage in your state?
The below map provides a look at how the minimum wage rates compare across the county.
Is a $15 federal minimum wage coming?
For years, some politicians have campaigned for a $15 federal minimum wage, and even made another go for it in 2021 as part of the proposed Raise the Wage Act of 2021. While there hasn’t been movement on the bill as of April, a majority of Americans are in favor of a higher minimum wage. According to Pew Research, 62% of Americans favor a minimum wage hike to $15 an hour.
In April 2021, President Biden issued an executive order requiring federal contractors to pay their workers a minimum wage of $15 per hour starting in 2022. This order will also slowly increase the minimum wage for tipped employees.
Many states have already taken the initiative to raise the minimum wage in their own jurisdictions: California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, and New York have all enacted policies to gradually increase their state’s minimum wages to $15. And according to the National Employment Law Project, 40 cities and counties will effectively bump their minimum wage to $15 or more in 2021.
What would happen if a $15 federal minimum wage became a reality?
The Congressional Budget Office estimates 900,000 people would be lifted out of poverty, employment would decrease by 1.4 million workers, and 17 million workers would get a bump in pay if the new federal minimum wage rate reached $15.
The 10 States with the Highest Minimum Wage Rates in 2021
Until a federal minimum wage bump happens that applies to the entire country, here are the 10 states with the highest minimum wages as of July 1, 2021.
No. 1: Oregon ($12.75)
In July 2021, Oregon’s standard minimum wage increased to $12.75. Workers in Oregon can earn more or less depending on where they live. In Portland, workers can expect to earn $14 per hour and workers in non-urban areas can earn $12 per hour.
No. 2: New Jersey (tied at $12)
Most wage earners in New Jersey are eligible to earn the minimum wage of $12 per hour, but there are some exemptions. Seasonal workers and employees who work for small employers with fewer than six workers will earn $.90 less. The state is also working toward a wage hike to $15 per hour over the next few years.
No. 3: Connecticut (tied at $12)
While Connecticut’s minimum wage is $12, it’s set to go up a dollar in August 2021 to $13 per hour. If the federal minimum wage ever catches up or becomes equal to the state’s rate, Connecticut will automatically increase its wage to .5% above it.
No. 4: Arizona (tied at $12.15)
Arizona’s minimum wage was raised to $12.15 per hour in January of 2021. Workers exempt from receiving the $12.15 minimum wage in Arizona include independent contractors, casual babysitters, and those employed by a small business with less than $500,000 in annual revenue.
No. 5: Maine (tied at $12.15)
From 2017 to 2020, Maine’s minimum wage increased annually on a set schedule. The state now follows the consumer price index to adjust its wage. Employees that earn less than $36,450 a year are eligible to earn overtime pay.
No. 6: Colorado ($12.32)
In 2006, Colorado’s state legislature passed a policy declaring the state’s minimum wage would keep up with inflation based on the consumer price index. Localities in Colorado also have the ability to pass their own minimum wage. Denver’s minimum wage rose to $14.77 at the start of 2021 and is set to reach $15.87 in January 2022.
No. 7: New York ($12.50)
New York’s minimum wage fluctuates depending on where you work. In New York City, the minimum wage is $15, and Long Island and Westchester County aren’t too far behind at $14 per hour (and are expected to increase to $15 in 2021). The rest of the state abides by a minimum wage of $12.50.
No. 8: California ($13)
By 2022-2023, California will have a $15 minimum wage throughout the state. Until then, workers at small businesses 25 employees or less earn $13 per hour; for workers at businesses with 26 employees or more, the minimum wage is $14. Twenty-three Californian cities, including those in Silicon Valley, have already hit or exceeded the $15 mark.
No. 9: Massachusetts ($13.50)
According to state policy, Massachusetts’s minimum wage has to be at least 50 cents more than the federal minimum wage, and the state has gone well beyond a rate of $7.75. As part of the state’s plan to eventually reach the $15 mark in 2023, Massachusetts increased the minimum wage in 2021 from $12.75 to $13.50.
No. 10: Washington ($13.69)
Washington has been a leading state when it comes to high minimum wages for quite some time. In 2014, Seattle passed legislation that would raise the minimum wage to $15 per hour by 2021. And as of January 2021, the minimum wage has increased in the city even further to $16.69. However, it’s not the only city to see a minimum wage above $16 in Washington. SeaTac, home base to Seattle-Tacoma International Airport, has a minimum wage of $16.57 for employers in the hospitality and transportation industries.
Honorable Mention: Washington D.C. ($15)
If the District of Columbia were a state, it would have grabbed the honor as the state with the highest minimum wage. Last year, the nation’s capital passed a $15 minimum wage and is set to increase the wage even more to keep up with the city’s rising cost of living.