The US minimum wage patchwork
The federal minimum wage is $7.25/hr — unchanged since 2009. Twenty-nine states and DC have higher state minimums. Some cities (Seattle, San Francisco, Los Angeles, Denver, Minneapolis) have higher city minimums. For tipped workers, a separate, much lower federal minimum ($2.13/hr) applies, with the employer required to make up any shortfall to the non-tipped minimum.
The practical minimum wage for a given worker is the highest of federal, state, and local rates applicable to their workplace location. A McDonald's in California pays $20/hr to fast-food workers (SB 1228 of 2024). A McDonald's in Mississippi pays $7.25/hr.
A "living wage" — the hourly rate needed to cover basic expenses (housing, food, transportation, healthcare) — is typically 1.5-3x the minimum wage depending on the metro. MIT's Living Wage Calculator shows single-adult living wages of $18-32/hr across US metros.
State minimum wages in 2026 — the range
As of 2026:
- $15-17+ tier: California ($16), Washington ($16.28), New York ($15-16 varies by region), Massachusetts ($15), Colorado ($14.42), Connecticut ($15.69), District of Columbia ($17.50)
- $12-14 tier: Illinois ($14), New Jersey ($15.13), Oregon ($15.45 for portland metro, lower elsewhere), Arizona ($14.35), Vermont ($14.01), Hawaii ($14)
- $10-11 tier: Missouri ($13.75), Michigan ($10.33), Florida ($13 on track to $15 by 2026), Nevada ($12), Maine ($14.15)
- Federal ($7.25) tier: Alabama, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Utah, Virginia (federal), Texas (federal), Idaho, Iowa, Kansas, Kentucky, Indiana, Oklahoma, Wisconsin, Pennsylvania (federal)
Many states have announced scheduled increases. Washington increases annually with inflation. Colorado's minimum is now indexed. Check your state's current rate at the state labor department or Department of Labor.
City minimums that override state
Some cities have enacted higher minimum wages than their states:
- Seattle: $20.29/hr (2026), highest in the US for many employer sizes
- San Francisco: $18.67/hr
- Denver: $18.81/hr
- New York City: $16/hr
- Minneapolis, St Paul: $15.57-16 tiered by employer size
- Portland OR metro: $15.95
- Chicago: $16.20 (for employers with 21+ employees)
Some states preempt city minimum wage rules, preventing cities from setting higher rates. Florida, Ohio, Michigan, and Alabama have state preemption laws. In those states, cities cannot enact their own higher minimums.
Living wage vs minimum wage — the gap
The living wage for a single adult without children in major US metros (MIT Living Wage Calculator, 2025 update):
- San Francisco: $29.40/hr
- New York: $26.82/hr
- Boston: $25.51/hr
- Seattle: $25.30/hr
- Washington DC: $23.87/hr
- Minneapolis: $19.33/hr
- Atlanta: $19.43/hr
- Houston: $17.47/hr
- Chicago: $19.72/hr
- Phoenix: $18.89/hr
For a single parent with one child, the living wage roughly doubles. For a household with two adults and two children, the living wage per adult is roughly 1.5-2x the single-adult living wage.
A worker earning federal minimum wage ($7.25) in Houston is at roughly 42% of the living wage. Same worker in Seattle at $20.29 is at 80% of single-adult living wage.
The tipped minimum wage issue
The federal tipped minimum is $2.13/hr, unchanged since 1991. Employer must ensure tips plus base total at least the federal minimum ($7.25) or state minimum if higher.
Seven states have eliminated the tip credit, requiring tipped workers to be paid the full minimum before tips: Alaska, California, Minnesota, Montana, Nevada, Oregon, Washington. In those states, a server's tips are on top of the state minimum, not a credit against it.
Washington DC has been phasing out its tip credit. By 2027, DC tipped workers will receive the full $17.50+ minimum wage before tips.
The tip credit debate is ongoing. Opponents argue it creates poverty-level base wages and tip-shaming culture. Proponents argue eliminating it raises restaurant prices and reduces server tips overall. State laws continue to evolve.
When minimum wage changes trigger raises for others
Large minimum wage increases often create "wage compression" — workers making $16-20/hr don't see raises when the minimum jumps from $10 to $15, leaving them proportionally worse off. Smart workers use minimum-wage increases as leverage for their own raises.
If you're at $18/hr and your state's minimum rises from $11 to $15, the gap between you and a new hire closed from $7 to $3. Ask: "Given the state minimum increase, I'd like to discuss a market adjustment to maintain my wage differential." This is a reasonable conversation and often gets a 5-10% raise.
Disclaimer
This is not legal or employment advice. Minimum wage rules change frequently at federal, state, city, and county levels. Tipped minimum rules and tip credit policies vary dramatically. For current minimum wage in your specific jurisdiction, contact your state labor department or the US Department of Labor. Living wage calculations are estimates based on composite cost-of-living data and depend heavily on family size, housing, and lifestyle.