:max_bytes(150000):strip_icc()/GettyImages-2161060991-a9b2296d68ff4efdaef6f40c48e3b006.jpg "Which State Has the Highest Minimum Wage and Which States Will Raise Pay in the New Year")
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Key Takeaways
- Nineteen states will raise their minimum wage on Jan. 1, 2026, including Hawaii ($16), Michigan ($13.73), and Nebraska ($15). Florida’s increase to $15 takes effect Sept. 30, 2026.
- The federal minimum wage has remained at $7.25 an hour for more than a decade and a half, though states can boost the floor for their own workers above that.
In the U.S., the federal minimum wage was established in 1938 as part of the Fair Labor Standards Act (FLSA). It was intended to guarantee that workers would earn at least a basic living wage. Today, the federal minimum wage is $7.25 per hour for employees covered under the FLSA, where it has stood for more than 15 years.
Many states mandate higher minimum wages due to the local cost of living. When an employee is covered by both state and federal minimum wage laws, they are entitled to be paid the higher of the two wages.
States Increasing Minimum Wage in 2026
In 2026, at least 22 states and Washington D.C. will raise their minimum wage. Nineteen states will see increases take effect on Jan. 1, 2026, with additional states following later in the year..
Minimum Wage vs. Cost of Living
In 2026, Washington state will have the highest state minimum wage at $17.13 per hour. This is more than double the federal minimum wage of $7.25. (Washington D.C., at $17.95, has the highest rate overall but is not a state.)
What does this actually mean for workers?
For someone working 40 hours per week and taking two weeks of time off per year for vacation, sick days, or to care for family members, $17.13 per hour provides an income of $34,260 per year.
A wage of $7.25, by contrast, provides an annual income of $14,500, which is below the federal poverty level for a household of one ($15,650).
While an annual income of $34,260 looks significantly better, it is still only slightly above the federal poverty level for a family of four ($32,150). And Washington state, where you can earn that wage, is one of the most expensive places to live in the United States.
A report from doxoINSIGHTS analyzing bill payments in the U.S. found that Washington residents pay, on average, $2,453 in monthly bills, or $29,436 per year. On a $34,260 annual income, that would leave only $4,824 for every other household expense.
| Annual Income at Minimum Wage vs. Annual Bills in the 5 Most Expensive U.S. States | |||
|---|---|---|---|
| Minimum Wage (2026) | Annual Income @ Minimum Wage | Avg. Annual Bills | |
| California | $16.90 | $33,800 | $34,248 |
| Hawaii | $16.00 | $32,000 | $32,544 |
| New Jersey | $15.49 | $30,980 | $31,452 |
| Massachusetts | $15.00 | $30,000 | $31,368 |
| Maryland | $15.00 | $30,000 | $30,060 |
West Virginia had the lowest monthly bills of all 50 states, at $1,149 per month or $13,788 per year. The current minimum wage in West Virginia is $8.75 per hour, slightly higher than the federal minimum wage. However, a full-time worker earning this wage and taking two weeks off work per year would have an annual income of only $17,500.
| Annual Income at Minimum Wage vs. Annual Bills in the 5 Least Expensive U.S. States | |||
|---|---|---|---|
| Minimum Wage (2026) | Annual Income @ Minimum Wage | Avg. Annual Bills | |
| West Virginia | $8.75 | $17,500 | $13,788 |
| Mississippi | $7.25 | $14,500 | $18,024 |
| Arkansas | $11.00 | $22,000 | $18,468 |
| Oklahoma | $7.25 | $14,500 | $18,516 |
| New Mexico | $12.00 | $24,000 | $18,972 |
The Bottom Line
The minimum wage is increasing nationwide. In 30 states, the minimum wage is higher than the federal minimum of $7.25 an hour, and at least 22 states, plus Washington D.C., will raise their minimum wage in 2026, with 19 of those increases taking effect on Jan. 1.
However, even with these increases, the minimum wage is not keeping pace with the cost of living in most places since states with high minimum wages often have some of the highest costs in the country.
