The past few years have been great for wage growth. Some states are taking it upon themselves to introduce legislation to help their inhabitants reach a better standard of living. Large companies are doing some of the work as well, for example Target raised its minimum wage to $11.00 in 2017, with a promise to get it up to $15.00 by 2020. Wages are rising in many places in the country and the talent market is getting more competitive. There are particular states that are leading the pack on wage growth for workers within their borders, opting to mandate employers to pay far beyond the federal minimum wage of $7.25.

It’s important to note that a number of states have passed legislation to raise their minimum wage at different dates throughout 2018. Below you will find the six states with the highest wage currently, based on the latest Department of Labor data. Let’s start with sixth highest on the list and count down to the number one spot.

 

Arizona and Vermont

The sixth and fifth highest minimum wages in the country come in at $10.50 in both Arizona and Vermont. Arizona has seen a significant lift in their minimum wage, as just five years ago in 2013, their minimum wage was $7.80 (just a mere 55 cents higher than the federal minimum) and would not have made it on this top six list.

Vermont, on the other hand, is consistently leading the country in terms of its minimum wage. Back in 2013, their minimum wage was also among the highest in the country at $8.60. It is interesting to see Arizona’s rate of minimum wage increase skyrocket, as Vermont’s stays rather consistent.

 

Massachusetts and California

There’s another tie for the fourth and third top minimum wage and this time they come from Massachusetts and California. These two states have minimum wages that are over 50% higher than the federal minimum wage, both paying workers at least $11.00 per hour.

California is a state with a high cost of living in many of its big cities. While it had a stagnant statewide minimum wage between 2008 and 2013, the state is growing their minimum wage again, at at rate of about $1.00 every two years so far, starting in 2014.

Massachusetts mirrored California minimum wage from 2002 to 2013. Then it begin increasing the minimum wage by $1.00 per year starting in 2013, until they leveled out at $11.00 per hour in 2017.

 

Washington State

In recent years, Washington has had slow, but steady minimum wage growth. That is, until it shot up from $9.47 in 2016 to $11.00 per hour in 2017. Now Washington offers a statewide minimum wage of $11.50, the second highest in the United States. As housing prices skyrocket in and around Seattle, this increase is more than welcome for hourly workers.

 

Washington, D.C.

Our nation’s capital tops the list of highest minimum wages for 2018. DC workers make a minimum of $12.50 per hour. This rate has grown substantially in just the last few years. Between 2006 and 2013 the districtwide minimum wage hovered between $7.00 and $8.25. Since then, DC has increased their minimum wage by at least $1 per year for several of the years since 2014.

 

Closing Thoughts

As we settle into 2018, many hourly workers in states around the country have the opportunity to take home more than they ever have. While operating costs for business owners may be increasing as a result, a better standard of living for employees is a great way to make 2018 one of the best years on record.

Oftentimes, businesses can pass on additional labor costs to customers with a healthy dose of transparency. Here in California, a number of restaurants and cafes have signs explaining that small increases in price help them meet minimum wage requirements and provide their workers with a better standard of living. That might not work for all businesses, but it can be a good solution for some that reduces friction.

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