Key Takeaways
- The federal minimum wage is $7.25 per hour. Washington state has the highest state minimum wage, at $16.66 per hour.
- Four states will raise their minimum wage in 2026: Florida ($15), Hawaii ($16), Michigan ($13.29), and Nebraska ($15).
- Many states are raising their minimum wage to keep pace with the rising cost of living, though most of them still don’t equal a living wage, especially for families.
In the United States, the federal minimum wage was established in 1938 as part of the Fair Labor Standards Act (FLSA). It was intended to guarantee that workers would earn at least a basic living wage. Today, the federal minimum wage is $7.25 per hour for employees covered under the FLSA. It has not increased since 2009.
Many states mandate a higher minimum wage due to the local cost of living. When an employee is covered by both state and federal minimum wage laws, they are entitled to be paid the higher of the two wages.
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States Increasing Minimum Wage in 2026
In 2026, four states will raise their minimum wage: Florida, Hawaii, Michigan, and Nebraska.
| Where State Minimum Wages Will Increase in 2026 | |||
|---|---|---|---|
| 2025 Minimum Wage | 2026 Minimum Wage | Effective Date | |
| Florida | $14.00 | $15.00 | 9/30/2026 |
| Hawaii | $14.00 | $16.00 | 1/1/2026 |
| Michigan | $12.48 | $13.29 | 2/21/2026 |
| Nebraska | $13.50 | $15.00 | 1/1/2026 |
Minimum Wage vs. Cost of Living
Currently, Washington state has the highest minimum wage at $16.66 per hour. This is more than double the federal minimum wage.
What does this actually mean for workers?
For someone working 40 hours per week and taking two weeks of time off per year for vacation, sick days, or to care for family members, $16.66 per hour provides an income of $33,320 per year.
A wage of $7.25, by contrast, provides an annual income of $14,500, which is below the federal poverty level for a household of one ($15,650). This means the federal minimum wage is not a living wage.
While an annual income of $33,320 looks significantly better, it is still only barely higher than the federal poverty level for a family of four ($32,150). And Washington state, where you can earn that wage ($16.66 per hour), is one of the most expensive places to live in the United States.
A report from doxoINSIGHTS analyzing bill payments in the U.S. found that Washington residents pay, on average, $2,453 in monthly bills, or $29,436 per year. On a $33,320 annual income, that would leave only $3,884 for every other household expense.
| Annual Income at Minimum Wage vs. Annual Bills in the 5 Most Expensive U.S. States | |||
|---|---|---|---|
| Minimum Wage (2026) | Annual Income @ Minimum Wage | Avg. Annual Bills | |
| California | $16.50 | $33,000 | $34,248 |
| Hawaii | $16.00 | $32,000 | $32,544 |
| New Jersey | $15.49 | $30,980 | $31,452 |
| Massachusetts | $15.00 | $30,000 | $31,368 |
| Maryland | $15.00 | $30,000 | $30,060 |
West Virginia had the lowest monthly bills of all 50 states, at $1,149 per month or $13,788 per year. The current minimum wage in West Virginia is $8.75 per hour, slightly higher than the federal minimum wage. However, a full-time worker earning this wage and taking two weeks off work per year would have an annual income of only $17,500.
| Annual Income at Minimum Wage vs. Annual Bills in the 5 Least Expensive U.S. States | |||
|---|---|---|---|
| Minimum Wage (2026) | Annual Income @ Minimum Wage | Avg. Annual Bills | |
| West Virginia | $8.75 | $17,500 | $13,788 |
| Mississippi | $7.25 | $14,500 | $18,024 |
| Arkansas | $11.00 | $22,000 | $18,468 |
| Oklahoma | $7.25 | $14,500 | $18,516 |
| New Mexico | $12.00 | $24,000 | $18,972 |
The Bottom Line
The minimum wage is increasing around the country. In over 30 states, the minimum wage is higher than the federal minimum of $7.25 an hour, and four states (Florida, Hawaii, Michigan, and Nebraska) will be raising their minimum wage in 2026.
However, even with these increases, in most places, the minimum wage is not keeping pace with the cost of living. States with high minimum wages often have some of the highest costs of living in the country. Though the minimum wage was originally established to provide a living wage, it no longer does so in many states.