5 Cities Where the Minimum Wage Is Above $10 an Hour
“Nothing helps families make ends meet like higher wages,” said President Barack Obama in his 2015 State of the Union Address. Yet despite strong support from the president, efforts to raise the federal minimum wage from $7.25 to $10.10 an hour have stalled.
While we may not see federal action on the minimum wage any time soon, many state and local governments are moving forward anyway. 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. Texas, Los Angeles, and Tacoma, Wash., may have wage initiatives on the ballot in the coming year.
In many cases, states and cities will be gradually raising their minimum wage over the next few years. Alaska’s minimum wage is set to hit $9.75 an hour on January 1, 2016, with future annual increases indexed to inflation. California’s minimum wage will be $10 an hour beginning in 2016, and Hawaii will have a minimum wage of $10.10 an hour beginning January 1, 2018. Overall, 7 million people will see an increase in their paychecks by 2017 because of recent state-wide minimum wage increases, according to a White House report.
A number of U.S. cities are ahead of the curve, however, having already taken action to boost their minimum wage. We’ve assembled a list of five cities where workers are guaranteed at least $10 an hour, or will be soon. 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: $11.05 an hour
San Francisco has long been on the forefront of the minimum wage battle, and in 2003 was the first city in the U.S. to set its own minimum wage requirement. 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.
In 2014, San Franciscans continued to show support for a generous minimum wage, approving a measure that would gradually increase the city’s minimum wage to $15 an hour by July 2018. As a result, the city’s minimum wage increased modestly on January 1, 2015, moving from $10.74 an hour to $11.05 an hour, with another increase to $12.25 an hour set to take effect on May 1.
Other Bay Area cities have followed San Francisco’s lead when it comes to setting wages. 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 high 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). “Workers in low-wage industries in San Francisco would likely see their pay increase by an average of over 20%,” as a result of minimum wage hikes, the OEA noted. That increase might make it easier for them to afford housing in the city where they work.
Minimum wage: $10 an hour by April 1, 2015
In 2014, Seattle enacted one of the most aggressive minimum wage increase plans in the U.S. Beginning April 1, 2015, employers with more than 500 employees in the U.S. will have 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.
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 a single parent with two children $908 a month, according to 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 in 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/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.