Which US State Has the Most Livable Minimum Wage? The Answers May Surprise You.

People in the US have often lamented how the cost of living has outstripped the federal minimum wage, which has remained stuck at $7.25 per hour since July 24, 2009.

Wages have severely  lagged labor productivity by a wide margin. Had wages kept up with productivity growth, wages would be closer to $33 an hour than the current $7.25 per hour. Much of the gains in productivity have gone to capital rather than labor, resulting in increasing income inequality.

MIT has a neat Living Wage Calculator to help people estimate the cost of living in a person's community or region. Based on their calculations, the weighted average (given the Civilian Non-Institutional Population in each state) living wage for the entire US is $12.08 per hour. This is almost 40% higher than the weighted average minimum wage of $8.71 per hour for the entire USA and more than twice the national poverty wage of just $5.71 per hour.

MIT 2017 Living Wage
By State
In US$ per Hour
State	MIT Living Wage	Federal Poverty Wage	Federal Minimum Wage
Alabama	$11.14	$5.80	$7.25
Alaska	$12.48	$7.24	$9.84
Arizona	$11.22	$5.80	$10.50
Arkansas	$10.38	$5.80	$8.50
California	$14.01	$5.00	$11.00
Colorado	$12.47	$5.80	$10.20
Connecticut	$12.88	$5.80	$10.10
Delaware	$12.44	$5.80	$8.25
District of Columbia	$17.11	$5.80	$12.50
Florida	$11.75	$5.80	$8.25
Georgia	$11.93	$5.80	$7.25
Hawaii	$15.39	$6.66	$10.10
Idaho	$10.64	$5.80	$7.25
Illinois	$12.50	$5.80	$8.25
Indiana	$10.70	$5.80	$7.25
Iowa	$10.53	$5.80	$7.25
Kansas	$10.69	$5.80	$7.25
Kentucky	$10.49	$5.80	$7.25
Louisiana	$10.91	$5.80	$7.25
Maine	$11.60	$5.80	$10.00
Maryland	$14.62	$5.80	$9.25
Massachusetts	$13.39	$5.80	$11.00
Michigan	$10.87	$5.80	$9.25
Minnesota	$11.53	$5.80	$9.65
Mississipi	$10.86	$5.80	$7.25
Missouri	$10.76	$5.80	$7.85
Montana	$10.95	$5.80	$8.30
Nebraska	$10.60	$5.80	$9.00
Nevada	$10.94	$5.80	$8.25
New Hampshire	$12.01	$5.80	$7.25
New Jersey	$13.72	$5.80	$8.60
New Mexico	$10.98	$5.80	$7.50
New York	$14.42	$5.80	$10.40
North Carolina	$11.36	$5.80	$7.25
North Dakota	$10.89	$5.80	$7.25
Ohio	$10.47	$5.80	$8.30
Oklahoma	$10.52	$5.80	$7.25
Oregon	$12.48	$5.80	$10.25
Pennsylvania	$11.11	$5.80	$7.25
Rhode Island	$12.10	$5.80	$10.10
South Carolina	$11.17	$5.80	$7.25
South Dakota	$10.03	$5.80	$8.85
Tennessee	$10.44	$5.80	$7.25
Texas	$11.03	$5.80	$7.25
Utah	$11.22	$5.80	$7.25
Vermont	$12.32	$5.80	$10.50
Virginia	$13.86	$5.80	$7.25
Washington	$12.28	$5.80	$11.50
West Virginia	$10.68	$5.80	$8.75
Wisconsin	$11.03	$5.80	$7.25
Wyoming	$10.63	$5.80	$7.25
National USA	$12.08	$5.71	$8.71

Based on these figures, the gap between the minimum wage and living wage for each state is the highest in Virginia, where the minimum wage of $7.25 per hour is just 52% of a statewide living wage of $13.86 per hour. The state of Washington has the most livable minimum wage. Its statewide minimum wage of $11.50 per hour is more than 90% of its computed living wage of $12.28 per hour.

State	Minimum Wage/Living Wage
Washington	93.65%
Arizona	93.58%
South Dakota	88.24%
Maine	86.21%
Vermont	85.23%
Michigan	85.10%
Nebraska	84.91%
Minnesota	83.69%
Rhode Island	83.47%
Massachusetts	82.15%
Oregon	82.13%
West Virginia	81.93%
Arkansas	81.89%
Colorado	81.80%
Ohio	79.27%
Alaska	78.85%
California	78.52%
Connecticut	78.42%
Montana	75.80%
Nevada	75.41%
District of Columbia	73.06%
Missouri	72.96%
New York	72.12%
Florida	70.21%
Tennessee	69.44%
Kentucky	69.11%
Oklahoma	68.92%
Iowa	68.85%
New Mexico	68.31%
Wyoming	68.20%
Idaho	68.14%
Kansas	67.82%
Indiana	67.76%
Mississipi	66.76%
North Dakota	66.57%
Louisiana	66.45%
Delaware	66.32%
Illinois	66.00%
Texas	65.73%
Wisconsin	65.73%
Hawaii	65.63%
Pennsylvania	65.26%
Alabama	65.08%
South Carolina	64.91%
Utah	64.62%
North Carolina	63.82%
Maryland	63.27%
New Jersey	62.68%
Georgia	60.77%
New Hampshire	60.37%
Virginia	52.31%

Source: MIT Living Wage Calculator

What Is the National Living Wage?

What is the National Living Wage?

It's no secret that a higher minimum wage is a hot button political issue these days. Just ask Bernie Sanders and his fight for a $15 per hour federal minimum wage, more than double what it is now: $7.25 per hour. The minimum wage has been stuck at that level since 2010, eight years ago. But the minimum wage has been stagnating not just for years at a time but for decades.

The federal minimum wage used to increase almost lock step with labor productivity until it decoupled sometime in the late 60's. Had the minimum wage kept up with labor productivity, the minimum wage would now be an astounding $19.33 per hour, as calculated by the Economic Policy Institute. This is almost 170% above current levels.

 
We recalculated EPI's chart and arrived at similar numbers: $19.06 per hour for 2017.

As a result of this stagnation, labor's contribution to GDP has been in steady decline. Labor as a share of GDP peaked at 66% in 1970. Today that ratio stands at just 60%, slightly higher than the multi-decade low of 59% in 2010.

A person working at minimum wage for 40 hours a week, 4 weeks per month, 12 months per year - in other words, pretty much all the time with no vacation, save for weekends - would earn just $13,920 per year or just 10% above the federal poverty levels of $12,140 for an individual. Obviously, a person working at minimum wage would not be able to sustain himself for very long.

MIT's Living Wage Calculator project states that:

"many working adults must seek public assistance and/or hold multiple jobs in order to afford to feed, clothe, house, and provide medical care for themselves and their families."

This reliance on public assistance puts a strain on public finances and amounts to a generous subsidy for corporations. It has become so pervasive that large corporations constantly route their workers to such programs or mount Thanksgiving collection drives for their employees.

MIT's Living Wage Calculator has calculated the living wage for every state, county, and major metropolitan area. Nationally, it estimates the living wage to be $16.07 per hour in 2017, around 7% higher than the $15 per hour minimum wage that most labor activists are asking for.

On a state by state basis, the living wage for each states ranges from a low of $10.03 per hour in South Dakota to a high of $17.11 for the District of Columbia.

MIT 2017 Living Wage
By State
In US$ per Hour
State	MIT Living Wage	Federal Poverty Wage	Federal Minimum Wage
Alabama	$11.14	$5.00	$7.25
Alaska	$12.48	$7.00	$9.84
Arizona	$11.22	$5.00	$10.50
Arkansas	$10.38	$5.00	$8.50
California	$14.01	$5.00	$11.00
Colorado	$12.47	$5.00	$10.20
Connecticut	$12.88	$5.00	$10.10
Delaware	$12.44	$5.00	$8.25
District of Columbia	$17.11	$5.00	$12.50
Florida	$11.75	$5.00	$8.25
Georgia	$11.93	$5.00	$7.25
Hawaii	$15.39	$6.00	$10.10
Idaho	$10.64	$5.00	$7.25
Illinois	$12.50	$5.00	$8.25
Indiana	$10.70	$5.00	$7.25
Iowa	$10.53	$5.00	$7.25
Kansas	$10.69	$5.00	$7.25
Kentucky	$10.49	$5.00	$7.25
Louisiana	$10.91	$5.00	$7.25
Maine	$11.60	$5.00	$10.00
Maryland	$14.62	$5.00	$9.25
Massachusetts	$13.39	$5.00	$11.00
Michigan	$10.87	$5.00	$9.25
Minnesota	$11.53	$5.00	$9.65
Mississipi	$10.86	$5.00	$7.25
Missouri	$10.76	$5.00	$7.85
Montana	$10.95	$5.00	$8.30
Nebraska	$10.60	$5.00	$9.00
Nevada	$10.94	$5.00	$8.25
New Hampshire	$12.01	$5.00	$7.25
New Jersey	$13.72	$5.00	$8.60
New Mexico	$10.98	$5.00	$7.50
New York	$14.42	$5.00	$10.40
North Carolina	$11.36	$5.00	$7.25
North Dakota	$10.89	$5.00	$7.25
Ohio	$10.47	$5.00	$8.30
Oklahoma	$10.52	$5.00	$7.25
Oregon	$12.48	$5.00	$10.25
Pennsylvania	$11.11	$5.00	$7.25
Rhode Island	$12.10	$5.00	$10.10
South Carolina	$11.17	$5.00	$7.25
South Dakota	$10.03	$5.00	$8.85
Tennessee	$10.44	$5.00	$7.25
Texas	$11.03	$5.00	$7.25
Utah	$11.22	$5.00	$7.25
Vermont	$12.32	$5.00	$10.50
Virginia	$13.86	$5.00	$7.25
Washington	$12.28	$5.00	$11.50
West Virginia	$10.68	$5.00	$8.75
Wisconsin	$11.03	$5.00	$7.25
Wyoming	$10.63	$5.00	$7.25
National USA	$12.08	$5.01	$8.71

When weighted by the Civilian Noninstitutional Population of each state, the National Living Wage amounts to $12.08 per hour while the weighted average federal minimum wage amounts to $8.71 per hour.