A growing number of cities are raising the minimum wage, which means bigger paychecks for many workers. However, the cost of living in each city can greatly impact how far these wages actually go. With this in mind, SmartAsset analyzed 79 of the largest U.S. cities to uncover where minimum wage goes the furthest. To do so, we evaluated how much the minimum wage (as of January 1, 2023) is worth after adjusting for the cost of living in each city. Our findings show Tucson (No. 6) and Phoenix (No. 8) ranked among the 10 cities where minimum wage goes the furthest.
Despite persistent inflation, the federal minimum wage remains $7.25 per hour. More than 13 years have passed since Congress last raised the federal minimum wage in 2009, the longest such stretch in American history. While many cities, counties and states across the nation enforce their own minimum wage well above the federal minimum, the cost of living in each can greatly impact just how far those wages can go.
To get a clearer picture of where minimum wage goes the furthest, SmartAsset ranked 79 of the largest U.S. cities based on how much the minimum wage (as of Jan. 1, 2023) is worth after adjusting for the cost of living in each city.
This is SmartAsset’s second study on which cities have the highest and lowest real minimum wage. You can read the 2022 edition here.
• Minimum wage goes furthest in Denver. After a January 2023 increase, the Colorado capital now has a minimum wage of $17.29 per hour, which ranks second-highest study-wide. However, residents in this city are getting the biggest bang for their buck. The city takes the No. 1 spot for the highest minimum real minimum wage, despite experiencing the 22nd-highest cost of living.
• Minimum wage workers in Seattle earn the most. No city in our study has a higher statutory minimum wage than Seattle, where minimum wage workers earn $18.69 an hour. But Seattle is also among the highest cost-of-living cities in our study. After adjusting for those costs, Seattle’s real minimum wage shrinks to $12.51.
• Less than a quarter of cities have a $15 minimum wage. Only 18 out of the 79 cities in our study have a statutory minimum wage of $15 or more. Meanwhile, 30 cities have a minimum wage that defaults to the federal minimum of $7.25, including four of the cities at the bottom of our rankings.
• Cost of living in Orlando closely tracks the national average. While Orlando is best known as the home of Walt Disney World, the cost of living in the city is just 0.2% above the national average. As a result, the city’s $11 minimum wage is worth $10.98 after adjusting for cost of living.
Cities Where Minimum Wage Goes the Furthest
1. Denver, CO
The Mile High City’s statutory minimum wage, which rose to $17.29 per hour on Jan. 1, 2023, ranks second-highest among the 79 cities in our study. A city ordinance adopted in 2019 requires Denver’s minimum wage to increase each year based on the Consumer Price Index, which tracks the price of goods and services in the economy. After factoring in the cost of living, which is 14.7% higher than the national average, Denver has the highest adjusted minimum wage in our study: $15.07.
2. Spokane, WA
Spokane doesn’t have its own minimum wage law, but Washington’s statewide minimum wage increased by $1.25 to $15.74 per hour on Jan. 1, 2023. After adjusting for the city’s cost of living, which is slightly above the national average, Spokane’s minimum wage is worth $15.02.
3. Buffalo, NY
Buffalo may be one of the snowiest cities in the country, but the minimum wage goes the third-furthest out of all 79 cities that were considered for this study. The New York state minimum wage jumped $1 on Dec. 31, 2022, reaching $14.20. However, Buffalo’s cost of living is below the national average, making the minimum wage worth $14.92 after adjusting for the city’s cost of living.
4. Minneapolis, MN
The minimum wage in Minneapolis increased to $15.19 on Jan. 1, 2023 for large employers, marking it the third increase to the city’s statutory minimum since a wage ordinance was approved in 2017. The minimum wage in Minnesota’s largest city is now 43% higher than the state-mandated minimum. After adjusting for cost of living in Minneapolis, which is 2.3% above the national average, the minimum wage equals $14.85 per hour.
5. St. Louis, MO
Under a state law that took effect in 2017, municipalities in Missouri cannot institute a minimum wage that’s higher than the state minimum. As a result, minimum wage workers in St. Louis earn $12 per hour. However, St. Louis has one of the lowest cost-of-living indexes in our study at 12.3% below the national average. When adjusting for the city’s cost of living, the hourly minimum wage in St. Louis is worth $13.68.