“Nothing helps families make ends meet like higher wages,” said President Barack Obama in his 2015 State of the Union Address. Cities, states, and businesses across the country have taken that message to heart and are making sure that workers are guaranteed to earn more than the federal minimum wage of $7.25 an hour.
Voters in Alaska, Arkansas, Illinois, Nebraska, and South Dakota went to the polls in 2014 and approved state-wide increases in the minimum wage, while elected officials in 10 other states and Washington, D.C., also implemented wage increases. Politicians and activists in Minnesota, Texas, and Indiana are lobbying for similar changes in their states, and Wal-Mart, Target, and McDonald’s have all announced plans to increase pay for their hourly workers. Overall, 7 million people will see an increase in their paychecks by 2017 because of state-wide minimum wage increases in the past two years, according to a White House report.
A number of U.S. cities are taking even more aggressive steps to boost their minimum wage. We’ve assembled a list of five cities where you are guaranteed to earn at least $10 an hour. In addition, we’ve compared the local minimum wage to the cost of living in those cities (according to the Economic Policy Institute’s (EPI) Family Budget Calculator and MIT’s Living Wage Calculator), in order to get an idea of how far a minimum wage really goes in different places.
1. San Francisco
Minimum wage: $12.25 an hour by May 2015
San Francisco was the first city in the U.S. to set its own minimum wage requirement, way back in 2013. In 2007, when the federal minimum wage increased for the first time in 10 years, from $5.15 an hour to $5.85 an hour, workers in San Francisco were already earning $9.14 an hour.
San Franciscans continue to show support for a generous minimum wage. In 2014, voters approved a measure that would gradually increase the city’s minimum wage to $15 an hour by July 2018. The next increase is set for May 1, when minimum wage will move from $11.05 to $12.25 an hour. That’s still slightly below the living wage of $12.83 per hour for a single adult, according to MIT.
Other Bay Area cities have followed San Francisco’s lead. Oakland’s minimum wage increased to $12.25 an hour on March 2, 2015. Berkeley increased its minimum wage to $10 an hour on October 1, 2014. Meanwhile, San Jose’s minimum wage increased to $10.30 an hour on January 1, up from $10.15 an hour in 2014.
Even with a relatively high minimum wage, however, many San Franciscans must struggle with the city’s steep cost of living, where a single adult with one child faces typical housing costs of $1,795 a month. “Within San Francisco, the median rent paid has increased at twice the rate of the minimum wage, since 2005,” according to a report by the city’s Office of Economic Analysis (OEA). Minimum wage hikes could translate to pay increases of more than 20% for low-wage workers, the OEA noted, which might make it easier for them to afford to live in the city where they work.
Minimum wage: $10 an hour
In 2014, Seattle enacted one of the most aggressive minimum wage increase plans in the U.S. Since April 1, 2015, employers with more than 500 employees in the U.S. are required to pay at least $11 an hour, while those with fewer than 500 employees in the U.S. will have to pay at least $10 an hour. By 2021, all Seattle workers will earn at least $15 an hour. Despite dire predictions about what such a bump would do to the city’s economy, there doesn’t seem to have been much fallout from the wage increase, at least not yet.
A living wage in Seattle is estimated to be $9.64 an hour for a single adult, rising to $20.53 an hour for a single adult supporting one child. But with current average hourly wages below $15 an hour for those working in fields like buildings and grounds maintenance, food preparation, and health care support, according to MIT data, an increase in the minimum wage would likely still bring significant benefits for many of the city’s workers.
3. Santa Fe, New Mexico
Minimum wage: $10.84 an hour
In 2004, Santa Fe passed a living wage ordinance, and wages for workers in New Mexico’s capital jumped from $5.15 an hour to $8.50 an hour. Further increases have increased the city’s minimum wage to nearly $11 an hour, one of the highest in the nation.
Santa Fe’s current minimum wage exceeds the estimated living wage of $9.32 an hour for a single adult living in the city. Families with just one full-time wage earner may still find themselves squeezed, however. The living wage for one adult supporting another adult and two children is $24.16 an hour, according to MIT. Child care expenses alone could run that family $908 a month, per EPI estimates.
4. Washington, D.C.
Minimum wage: $10.50 an hour by July 2015
Beginning July 1, 2015, residents of Washington, D.C., will be entitled to a minimum wage of $10.50 an hour. In July 2016, that will increase to $11.50. After 2016, annual increases to the D.C. minimum wage will be tied to the consumer price index.
Still, D.C.’s minimum wage falls below the wage needed to live comfortably in the city. A living wage for a single adult living in Washington, D.C., is $13.68 an hour, while a living wage for one adult supporting one child is $26.37. Steep housing costs are partly to blame for the high cost of living in the nation’s capital. The EPI estimates that a single adult with one child can expect to spend $1,412 a month on housing alone.
Minimum wage: $10 an hour by July 2015
In December 2014, the Chicago city council approved a measure that would raise the city’s minimum wage to $10 an hour beginning on July 1, 2015, with the wage eventually increasing to at $13 an hour by 2019. More than 400,000 city residents should see a hike in their pay as a result, according to Mayor Rahm Emanuel’s office.
Nonetheless, a minimum wage of $10 an hour still falls slightly below living wage estimates for the city, where a single adult would need to earn at least $10.48 an hour to earn a living wage, according to MIT. A living wage for a worker who was the sole wage earner in a family with one other adult and one child would be $18.98 an hour.