Search

5 states with the highest minimum wages

Nov 07, 2013

Populist anger, (slowly) rising wages

Tuesday night's election winners didn't include just governors and mayors. Low-wage workers also scored big.

The small town of SeaTac, Wash. approved a $15 minimum wage for workers in and around the Seattle-Tacoma International Airport, according to early returns, which are tallied as the voters' mail-in ballots are counted.

And in New Jersey, 60% of voters who came out approved a one dollar increase to the state's minimum wage, to $8.25.

The votes came after a summer filled with outrage over the hourly pay that low-wage workers -- especially those in the fast-food industry -- must live on.

That anger can be attributed, in part, to the growth of low-wage jobs, says Paul Sonn, legal co-director at the National Employment Law Project. Low-wage gigs make up a significant portion of the American economy's new jobs. Indeed, over half of jobs added in the U.S. since April 2010 have been in low-paying industries, according to a May 2013 report by the Royal Bank of Scotland. "That's driving policy makers at the city level to boost low wages," Sonn says..

The current federal minimum wage of $7.25 hasn't budged since 2009. "When the government is slow to raise the federal minimum wage, states do it on their own," says Chris Tilly, director of the UCLA Institute for Research on Labor and Employment.

The approval of the New Jersey minimum wage increase is noteworthy as it ties the hourly rate to inflation and puts into place annual automatic increases.

When the wage hike goes into effect in January, New Jersey will be the 20th state to outpace the federal minimum wage, but its $8.25 rate won't be the highest. Here are the five states that beat it.

Washington

The state's minimum wage is increased every year, as required by an initiative that voters passed in 1998. The 2014 rate of $9.32 represents a 13¢ increase that was dictated by the 1.5% uptick in the Consumer Price Index since August 2012.

Oregon

The Consumer Price Index also governs Oregon's minimum wage, in accordance with a 2002 referendum that ties the wage to inflation. The state's 2014 rate will be a 15¢ increase from last year's.

California

In September 2013, Governor Jerry Brown signed into law a $10 minimum wage, which will be phased in over two years, with the first hike to $9.00 taking effect next July. The second increase, to $10, will occur Jan. 1, 2016.

Vermont

Since 2007, the state has raised its minimum wage every year by whatever was lower: 5% or the percentage increase of the CPI. The 2014 rate represents a 13¢ bump.

Connecticut

In June 2013, Governor Dan Malloy signed into law a $9 minimum wage that will come in two steps. The first hike to $8.70 will take place Jan. 1, 2014. The second, to $9, will go into effect at the start of 2015.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions