7 Surprising Cities Where You’ll Find America’s Highest Minimum Wage

Source: iStock

Source: iStock

Recently, Los Angeles became the third American city to increase the minimum wage to $15 per hour. Following in the footsteps of other west coast cities like Seattle and San Francisco, leaders in L.A. called the action an attempt to help lift hundreds of thousands of the city’s citizens out of poverty, and help the city remain a bastion of economic power.

“Today, help is on the way for the one million Angelenos who live in poverty.  I started this campaign to raise the minimum wage to create broader economic prosperity in our city and because the minimum wage should not be a poverty wage in Los Angeles,” Los Angeles Mayor Eric Garcetti said in a press release.

While L.A.’s leaders have the best of intentions, the backlash against the move has been swift and fierce — moreso than it was when Seattle and San Francisco made the same move. The Washington Post called it “bold,” The New Yorker said it was “fascinating”, and an opinion piece run by the New York Times said it was a “bombshell.” So, what makes it different in the case of Los Angeles? The wage raise is expected to affect more than half of the city’s workforce, after all, arming as much as a million people with extra spending power.

According to insight from FiveThirtyEight, the problem is that the hike to $15, to be instituted over the next five years, will not represent much of a wage increase by 2020. In addition, Los Angeles is a very expensive city, much like San Francisco or New York City, and even $15 per hour doesn’t get workers very far. In fact, $15 per hour in Los Angeles is equal to around $11 in the average American community.

Using data from the Council For Community and Economic Research, FiveThirtyEight took a look at where minimum wage actually does lift workers up — that is, in which cities the minimum wage actually provides the most purchasing power, or bang for your buck. By taking the minimum wage, and adjusting for the cost of living in a given city, the results are rather surprising.

We’ve listed seven of these cities below, but for a more extensive list, check out FiveThirtyEight’s work. Read on to see seven cities that have the highest minimum wage, when adjusted for the cost of living.

Source: iStock

Source: iStock

7. Nashville, Tenn.

As FiveThirtyEight explains, southern cities are surprisingly affordable, even on minimum wage, because of the relative low cost of living. Tennessee doesn’t have a state-mandated minimum wage, so employers default to the federal minimum wage of $7.25 per hour. But even at that wage level, a low cost of living in cities like Nashville afford workers $8.10 in purchasing power. There is hope for a raise in the future, as the minimum wage is becoming an issue in the city itself.

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6. Jacksonville, Fla.

Another southern city with a relative low cost of living, Jacksonville minimum wage workers pull in $8.05 per hour, or $5.03 for tipped employees. The cost of living adjustment squeezes a bit more purchasing power out of that wage, affording $8.31 in relative terms. That’s definitely the best rate for workers in the entire state, as other cities like Orlando, Tampa, and Miami are more expensive for a variety of reasons.

Source: Thinkstock

Source: Thinkstock

5. Phoenix, Ariz.

The castle in the desert, Phoenix is another city that defaults to its home state’s minimum wage. As of this year, that is $8.05 per hour. That’s the same amount that workers in Jacksonville make, at the bare minimum, but folks in Phoenix get a benefit of an extra $0.05 of purchasing power — at $8.36 in relative terms. It’s not much, but when you’re on the bottom of the wage scale, ever nickel counts.

Spencer Platt/Getty Images

Spencer Platt/Getty Images

4. Detroit, Mich.

Detroit may be the most surprising city on this list, given that often the first thing that comes to mind when the city’s name is mentioned is the economic hardship it’s experienced over the past few decades. But that hardship has come with a substantially lower cost of living than in other cities. Detroit’s minimum wage is $8.15 right now, with a cost of living adjustment bumping it to $8.47. In 2018, the minimum wage will get bumped to $9.25.

Dan Callister / Hulton Archive / Getty Images

Dan Callister / Hulton Archive / Getty Images

3. Seattle, WA

Seattle became the first city to aim for the fences by raising the minimum wage to $15. The city’s planned wage hike is coming in increments, and as of this writing, the minimum wage has been raised to $11 per hour — the highest in the country. Seattle is an expensive city, although cheaper than Los Angeles and San Francisco, giving it a leg up on its west coast contemporaries. Despite the wage being $11, the price tag of living in the city means $11 only accounts for $8.51 when adjusted for cost of living. Clearly, Seattle is trying to get ahead of the curve, but as the city becomes even more expensive, even big spikes in actual wages don’t give that much extra spending power to workers.

Source: iStock

Source: iStock

2. Memphis, Tenn.

Like Nashville, Memphis minimum wage workers earn the federal minimum wage of $7.25 per hour. But Memphis is even cheaper than Nashville in terms of living expenses, so workers have a slight advantage in purchasing power. Low wage workers in Memphis get the equivalent of $8.54 out of their minimum wage earnings. Also like Nashville, people are calling for the city to bump the minimum wage within the city limits. We’ll have to wait and see if that idea picks up any support, however.

Source: Thinkstock

Source: Thinkstock

1. Columbus, Ohio

Per FiveThirtyEight’s calculations, the best place in America to earn minimum wage is Columbus, Ohio. Ohio’s minimum wage was raised to $8.10 this year, and for tipped-employees, the rate went up to $4.05 per hour. In relative terms, by adjusting for the low cost of living in Columbus, workers can actually get as much as $8.91 in real purchasing power from that $8.10 — the most in the country.

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