Minimum wage increases in 2026 will occur in these 20 states
Nearly 20 states plan to raise their minimum wages in the new year.
Fox – 5 DC
American families in half the country (25 states) need to earn about $30 an hour, or about $53,000 a year after taxes, to make ends meet, according to an analysis by MoneyLion, an all-in-one financial app platform.
Using data from the 2024 Consumer Expenditure Survey, MoneyLion calculated the cost of “essentials” in each state, including housing, groceries, utilities, medical care, and transportation, and found that Hawaii requires the highest hourly wage of $69.43 to survive. In State Zero, a family of four can survive on less than $20 an hour. According to the report, a family of four is defined as a married couple and their children, with the oldest child between the ages of 6 and 17.
That figure stands in contrast to the federal hourly minimum wage, which remains at the 2009 rate of $7.25, and Washington, D.C., which is technically not a state, has the highest state minimum wage of $17.95 this year, according to Federal Reserve data.
“These numbers highlight how difficult it is for families earning at or near their state’s minimum wage,” MoneyLion said.
Which state requires the highest hourly wage to survive?
Hawaii tops the list with an hourly wage of $69.43 and an annual after-tax wage of $110,782, which covers annual grocery costs of $12,505, housing costs of $62,903 and medical costs of $10,321, according to MoneyLion.
Then:
- In Massachusetts, on an hourly wage of $54.25, or $89,725 per year after taxes, you pay $9,812 per year for groceries, $49,063 for housing, and $10,788 per year for health care.
- Californians would need to earn $46.22 an hour, or $79,367 after taxes, each year to cover $10,301 in groceries, $38,298 in housing costs, and $8,387 in medical expenses.
Which state requires the lowest hourly wage to survive?
A family of four in Mississippi and Oklahoma requires a minimum living wage. These are the only two states with hourly wage requirements in the $25 range.
- Mississippi residents need an hourly wage of $25.35, or $45,424 per year after taxes, to pay for $9,036 in annual grocery costs, $14,788 in housing costs, and $7,541 in medical costs.
- Oklahomans must earn $25.65 an hour, or $45,620 a year after taxes, to pay $9,074 for groceries, $14,304 for housing, and $7,501 for health care.
How can people save when the cost of living exceeds wages?
Experts say people facing lower wages than they need to cover essentials need to budget well.
Start with small steps, they said.
“Pick one category of overspending and cut it by 20% this month,” said Dmitry Savlansky, CEO of personal finance and budgeting app PocketGuard. “Next month, try something different.”
Try to eliminate unnecessary subscriptions, reduce restaurant expenses, and cut down on unnecessary spending, says certified financial health counselor Rudri Bhatt Patel on the MoneyLion blog. Allocate that money for savings and automate it, she said.
Sablanski said it’s also important to review your budget each month to detect spending and saving patterns so you can adjust accordingly. “Those who see their progress are the ones who keep moving forward,” he says.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday..
