(NEXSTAR) — Though multiple states raised their minimum wages at the start of the year, and even more are expected to see a spike in 2023, many of the nation’s largest cities have their own minimum wages. While rates may be higher than the state or federal minimum wages, the money may not go as far in some of those cities, a new analysis has found.
In a recent study, the financial planning website SmartAsset analyzed the minimum wages of 79 of the largest U.S. cities and adjusted those rates based on the local cost of living according to data from the Council for Community and Economic Research. Cost of living included the price of housing, groceries, utilities, transportation, and other goods and services. Researchers were looking to find where the local minimum wage goes the farthest.
Less than 20 of the cities analyzed have a minimum wage at or above $15 an hour, according to SmartAsset. In 30 cities, the minimum wage defaults to the national minimum of $7.25, a rate that hasn’t changed since 2009.
Overall, SmartAsset found residents in Denver, where the minimum wage is $17.29 an hour, are “getting the biggest bang for their buck.” Colorado’s capital had the second-highest minimum wage in the study and the 22nd-highest cost of living.
Seattle had the highest minimum wage in the study at $18.69. But, coupled with its cost of living, which was also the highest in the study, SmartAsset determined the Washington metro’s adjusted minimum wage equates to $12.51.
Orlando had the closest minimum wage to cost of living ratio, according to SmartAsset. The Florida city’s minimum wage of $11 was adjusted to just $10.98 because of its 0.2% cost of living.
SmartAsset found the local minimum wage goes the furthest in these five cities:
- Spokane, Washington
- Buffalo, New York
- St. Louis
Based on SmartAsset’s findings, there were some cities where the local minimum wage’s purchasing power was drastically cut because of the cost of living.
At the bottom of the list were Honolulu and Plano, Texas. Though Honolulu, at $12 an hour, has a higher minimum wage than the 14 other cities at the bottom of the list, its cost of living – 85.6% higher than the national average – makes the pay rate worth just $6.47. Plano’s cost of living is lower than Honolulu’s, but because it adheres to the national minimum wage, the adjusted rate equates to $6.47.
SmartAsset found the minimum wages in these cities have the lowest purchasing powers:
- Plano, Texas
- New Orleans
For the five states represented above, the minimum wage is not set to increase in 2023. Alternatively, the minimum wage for the five states represented at the top of SmartAsset’s list – Colorado, Washington, New York, Minnesota, and Missouri – saw their minimum wages increase already this year.
SmartAsset’s full study can be found here.
Following increases in 2023, 30 states will have minimum wages above the federal rate of $7.25. Of those, only two have a minimum wage below $10, according to the Department of Labor: Montana and West Virginia.
(Information from the Nexstar Media Wire)