Where a Minimum Wage Goes Furthest in 2026

Minimum wage laws expanded during the Great Depression to support a basic standard of living, but their value today depends on local costs. A relatively high minimum wage may still fall far short in an expensive state, while a lower minimum wage may cover a larger share of basic expenses in areas where costs are lower. In some states, the minimum wage approaches a living wage — the income needed to maintain a basic but adequate lifestyle. In others, the gap is wider, leaving workers with greater difficulty covering essential expenses.

SmartAsset analyzed minimum wages in all 50 states, comparing them with 2026 living-wage levels to determine where minimum-wage earnings go furthest. For each state, the analysis also calculated the Kaitz index, which expresses the annualized minimum wage as a share of the median wage. The results reveal where a minimum-wage paycheck comes closest to supporting a viable living and where workers face the steepest shortfall.

Key Findings

Missouri has the nation’s strongest minimum wage relative to living costs. Although the Show Me State’s $15-per-hour minimum wage is far from the nation’s highest, it comes closest to covering the local living wage. Working full time, minimum-wage workers earn $31,200 annually, or about 71% of the state’s $44,242 living wage. Nebraska ranks second, followed by Connecticut.
New Hampshire has the nation’s weakest minimum wage relative to living costs. The Granite State sets its minimum wage at the federal rate of $7.25 per hour. A full-time minimum-wage worker earns just 28.1% of the state’s living wage.
Massachusetts stands out among the 10 most expensive states. Among the 10 states with the highest living wages, it is the only one where annual minimum-wage earnings cover less than half, at 49%.
By nominal dollar value, Washington has the nation’s highest state minimum wage. The statewide rate is $17.13 per hour, though exceptions apply: Employers may pay 14- and 15-year-olds 85% of the minimum wage, while Seattle’s minimum wage is $21.30 per hour, and some smaller suburbs have even higher rates.
Up to 14 states compare favorably to international averages. The Kaitz Index measures the ratio of the minimum wage to an area’s median wage. Across 30 nations with minimum wage laws in the Organization for Economic Cooperation and Development (OECD) — a group of primarily high-income, developed nations — that ratio is 0.56. Up to 14 U.S. states meet or exceed that ratio on this study’s basis. They are Arizona, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Michigan, Missouri, Nebraska, New Jersey, Oregon and Rhode Island.*

* The OECD benchmark is conventionally measured against the median earnings of full-time workers, whereas the state ratios use BLS OEWS medians covering all wage and salary jobs, including part-time work, so state ratios may run higher than a like-for-like comparison would show, and the count of states at or above 0.56 should be read as an upper bound.

Minimum Wage by State

Alabama: $7.25
Alaska: $14.00
Arizona: $15.15
Arkansas: $11.00
California: $16.90
Colorado: $15.16
Connecticut: $16.94
Delaware: $15.00
Florida: $15.00
Georgia: $7.25
Hawaii: $16.00
Idaho: $7.25
Illinois: $15.00
Indiana: $7.25
Iowa: $7.25
Kansas: $7.25
Kentucky: $7.25
Louisiana: $7.25
Maine: $15.10
Maryland: $15.00
Massachusetts: $15.00
Michigan: $13.73
Minnesota: $11.41
Mississippi: $7.25
Missouri: $15.00
Montana: $10.85
Nebraska: $15.00
Nevada: $12.00
New Hampshire: $7.25
New Jersey: $15.92
New Mexico: $12.00
New York: $16.00
North Carolina: $7.25
North Dakota: $7.25
Ohio: $11.00
Oklahoma: $7.25
Oregon: $15.55
Pennsylvania: $7.25
Rhode Island: $16.00
South Carolina: $7.25
South Dakota: $11.85
Tennessee: $7.25
Texas: $7.25
Utah: $7.25
Vermont: $14.42
Virginia: $12.77
Washington: $17.13
West Virginia: $8.75
Wisconsin: $7.25
Wyoming: $7.25

Note: Five states have no state minimum wage law: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Workers in those states are generally covered by the federal minimum wage of $7.25 per hour. Some states set different minimum wages based on location or business type. For example, the minimum wage in Suffolk and Westchester counties in New York is $17 per hour, compared with the state’s $16 rest-of-state rate.

Questions and Answers

In which state in the U.S. does the minimum wage go furthest?

Missouri. There, the annualized minimum wage is equal to about 71% of the living wage.

What is a living wage?

The living wage is the earnings required to afford a minimum but adequate lifestyle, including food prepared and consumed at home, transportation, clothing, basic personal care products, cleaning supplies, various miscellaneous expenses and housing — calculated as the 40th-percentile gross rent for a studio apartment for single people with no children. It excludes things like vacations, dining out, investing for retirement and building emergency savings.

What is the Kaitz index?

Developed in 1970 by economist Hyman Kaitz, the Kaitz index is an economic indicator that measures the ratio of the legal minimum wage to the median wage. A higher Kaitz index indicates that the minimum wage is closer to the median wage. This may raise earnings for low-wage workers and reduce in-work poverty, but it can also increase risks of employment losses and inflation.

What is the poverty level?

The poverty level is an income threshold that represents the minimum resources needed to avoid economic deprivation. It is 1963 food costs multiplied by three, then updated for inflation through the current year. In 2026, that value is $15,960 for one person uniformly throughout the continental United States (Alaska and Hawaii have different thresholds).

What is the salary needed to live comfortably?

An area’s salary needed to live comfortably is the earnings required to live using the “50/30/20 rule.” Under the rule, 50% of income goes to necessities like housing and utilities, 30% to discretionary spending and 20% to savings for retirement and emergencies. For single adults, it ranges from a low of $81,245 (in West Virginia) to a high of $129,002 (in Hawaii).

Methodology

The MIT Living Wage Calculator was used to source the living wage for a single adult with no children in each state. MIT data was published in February 2026. Median wage is modeled using May 2025 U.S. Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) program data for all occupations by state. To estimate 2026 median wages, each state’s BLS OEWS median wage was increased by the 12-month Employment Cost Index (ECI) wage-growth rate for its Census division, the smallest possible unit of analysis. Each state’s minimum wage, or the federal minimum wage in places without a state minimum wage statute, as recorded by the U.S. Department of Labor on July 1, 2026 (adjusted to $15 for Florida to account for a wage change effective in September), was annualized and divided by the state’s living wage to produce minimum-wage sufficiency, and by its estimated 2026 median wage to produce the Kaitz index. Annualized minimum-wage earnings assume 2,080 hours and use each state’s standard rate rather than tipped, youth or local rates (e.g. Oregon’s standard state rate of $15.55 was used, though Oregon provides for a higher wage in the Portland metro area, and lower wage in non-urban counties). For Kaitz index comparisons, the OECD benchmark is conventionally measured against the median earnings of full-time workers, whereas the state ratios use BLS OEWS medians covering all wage and salary jobs, including part-time work, so state ratios may run higher than a like-for-like comparison would show, and the count of states at or above 0.56 should be read as an upper bound. Source data providers are not affiliated with, and do not endorse or sponsor, this study or its findings.