1. New York

New York skyline
vichie81 / Shutterstock

Living wage: $88,056

Median income: $67,844

Minimum wage: $49,088

Unsurprisingly, New York claims the No. 1 spot with the highest living wage in the country.

One of the biggest culprits is child care; according to MIT, New Yorkers pay a staggering $23,215 per year, over $7,000 more than any other state on this list.

New York also has the second-largest gap on the list between the living wage and minimum wage. Two low-income parents bring in $38,968 less than they need.

And it’s not just workers at the bottom of the ladder who are struggling. Unlike other states where the median income leaves cash to spare — investing even a few dollars with an app like Acorns or Stash can make a difference — New York is a huge challenge even for average earners. The disparity between the median income and the living wage is more than $20,000.

2. California

L.A.
Sean Pavone / Shutterstock

Living wage: $81,056

Median income: $75,277

Minimum wage: $49,920 - $54,080

The most populous state in the U.S. is also one of the most expensive. Clearly, affordability is not the main draw.

Couples with two kids typically pay about $19,875 each year for housing, putting California near the top of the list. Only residents of Hawaii and the District of Columbia shell out more.

California’s minimum wage ranges between $12 to $13 an hour, depending on how many employees a company has. Even though the minimum wage is one of the highest in the country, families with both parents earning $13 per hour fall almost $27,000 short of meeting their needs.

3. Maryland

Baltimore
Sean Pavone / Shutterstock

Living wage: $76,043

Median income: $83,242

Minimum wage: $45,760

Although Maryland is sometimes known as the Free State, living there is anything but. Families earning minimum wage can expect to make $30,283 less than the living wage.

The cost of housing and transportation are higher in Maryland than in most states on this list, taking up almost two-thirds of a household’s income if it’s subsisting on the minimum wage.

Families earning Maryland’s median income — the second-highest in the United States — are far better off. They’re able to bank almost $7,200 after paying for their basic expenses, leaving enough money to save for retirement and buy a second helping of crab cakes.

4. New Jersey

Atlantic City
ESB Professional / Shutterstock

Living wage: $75,884

Median income: $81,740

Minimum wage: $45,760

Life is not all roses in the Garden State, especially for anyone trying to raise a family on minimum wage. Living well in New Jersey costs $30,000 more than two low-income workers bring home in a year.

New Jersey also has some of the highest medical costs among states on this list at $7,688 per year.

The minimum wage of $10 per hour will increase by $1 every year until 2025, at which point the annual increase will be based on the Consumer Price Index. But even at $15 an hour, minimum-wage families would still fall $13,484 short of the current living wage.

5. District of Columbia

Washington D.C.
Diegomezr / Shutterstock

Living wage: $75,551

Median income: $85,203

Minimum wage: $58,240

The nation’s capital is home to both the highest minimum wage and highest median income in the country.

The current minimum wage of $14 an hour will increase to $15 on July 1. Those figures will make plenty jealous, but that doesn’t mean D.C.’s minimum-wage workers are prospering. Two parents earning the current rate can still expect to bring home $17,311 less than they need.

D.C. has some of the highest housing costs around — $21,516 per year — so a move to the Federal City might not be a wise choice depending on what you earn.

6. Massachusetts

Boston
Sean Pavone / Shutterstock

Living wage: $75,418

Median income: $79,835

Minimum wage: $53,040

Massachusetts may have one of the highest minimum wages in the United States, but MIT says families earning that much will still be $22,378 in the red each year.

Conditions are improving over the next few years. The current minimum wage of $12.75 will increase by $0.75 an hour each year until it reaches $15 in 2023.

In addition to its high minimum wage, Massachusetts also has one of the highest median incomes in the country. Households earning that much or more can expect to bank at least $4,400 after expenses, allowing young families to splurge on Patriots swag and get a much-needed early start on their retirement savings.

7. Alaska

Anchorage
Rocky Grimes / Shutterstock

Living wage: $74,247

Median income: $74,346

Minimum wage: $42,390

Just because Alaska is cold and tax-free doesn’t mean it’s cheap to live there. In fact, families earning minimum wage will bring home almost $32,000 less than the state’s living wage.

Alaska also has some of the highest child-care costs among states on this list at $15,989. That’s more than a third of the total income of a minimum-wage family.

The high cost of living in a remote location is tough on most residents. The median household income for the Last Frontier is just $100 more than the living wage — enough to buy a new pair of gloves but not much else.

8. Connecticut

Hartford
Mihai_Andritoiu / Shutterstock

Living wage: $74,216

Median income: $76,348

Minimum wage: $45,760

While the upper crust may associate Connecticut with ritzy country clubs and seafood dinners, many families are living a less glamorous reality.

The disparity between minimum-wage parents’ annual pay and the living wage is $28,456. Starting in September, the minimum wage will increase by $1 every 11 months until 2024, when the state launches annual increases tied to an inflation measure.

One upside to raising a family in the Constitution State is that average transportation costs are low at $9,650 annually. That won’t buy you any yacht rides around the Cape, but you’ll be able to get to work and back at a reasonable price.

9. Colorado

Denver
EdgeOfReason / Shutterstock

Living wage: $73,132

Median income: $71,953

Minimum wage: $49,920

For low-income families in Colorado, the name “Mile High State” doesn’t just refer to the elevation. A living wage can seem out of reach.

Colorado’s minimum wage is the fifth-highest in the United States and in 2021 will start increasing annually based on the cost of living. Still, two parents earning today’s rate of $12 per hour will fall more than $23,000 short of what it costs to support themselves and their kids.

Likewise, the median income for Colorado is almost $1,200 less than the living wage, leaving even middle-income families no money for lift tickets, let alone retirement.

10. Washington

Seattle
Suzana_Pomer / Shutterstock

Living wage: $72,673

Median income: $74,073

Minimum wage: $56,160

Washington is often called the State of Love and Trust, and there may be something to that. Even though its living wage is relatively high, Washington also has the second-highest minimum wage in the country at $13.50 an hour.

As a result, Washington has the smallest gap of any state on this list between living wage and minimum wage for families of four: $16,513 per year. Make a quick buck on the side and you can close that gap even further.

The median household income for Washington State is also more than $1,400 higher than the living wage, so even if the weather is always rainy and gray, the future may not look so gloomy.

11. Oregon

Portland
zhu difeng / Shutterstock

Living wage: $72,312

Median income: $63,426

Minimum wage: $46,800

Although Oregon’s minimum wage is higher than half the other states on this list, the substantial cost of living there will force many low-income families to chip away at their savings to get by.

Two parents earning the current minimum wage of $11.25 per hour currently make $25,512 less than they need. Oregon’s minimum wage will increase by $0.75 per hour every July 1 until 2023, when annual increases will be tied to the Consumer Price Index.

Even households earning the median income in the Beaver State will fall almost $9,000 short of the living wage. When Portlanders have to give up their daily coffee to save a few bucks, you know times are hard.

12. Virginia

Richmond
Sean Pavone / Shutterstock

Living wage: $72,223

Median income: $72,577

Minimum wage: $30,160

Nowhere in the United States is it harder to survive on the minimum wage than in Virginia. Two parents working full-time earn less than half of what they need, falling a staggering $42,000 behind each year.

Part of the problem is that Virginia is one of two states on this list where the minimum wage doesn’t rise above the federal requirement of just $7.25 an hour. It also has the highest average medical costs of the 20 states at $7,763 per year.

Households earning the median income can start growing a small nest egg with a high-interest savings account, as their annual intake matches the living wage. Those less fortunate may want to leave the Old Dominion behind for a new frontier.

13. Rhode Island

Providence
Sean Pavone / Shutterstock

Living wage: $70,153

Median income: $64,340

Minimum wage: $43,680

If you’re planning to make your home in the Ocean State, don’t be surprised if you get caught in the undertow.

Families making minimum wage will earn roughly $26,000 less than they need to afford the bare essentials, while families earning the state’s median income will fall more than $5,800 short.

It may be the smallest state in the union, but life in “Little Rhody” comes at a surprisingly large cost. One upside: Transportation costs are low compared to the other states on this list. Just $9,650 is enough for a family of four to get around.

14. Illinois

Chicago
f11 photo / Shutterstock

Living wage: $69,760

Median income: $65,030

Minimum wage: $38,480

Although the living wage in Illinois is less than $70,000 per year, getting by in the Land of Lincoln still costs a pretty penny.

At the current minimum wage of $9.25, two parents working full time will fall more than $31,000 short of their basic needs. Illinois’ minimum wage will increase to $10 an hour on July 1, 2020, and then increase by $1 an hour each year until 2025.

But even if the living wage stays the same as it is today — and history suggests it won’t — two parents earning $15 an hour in 2025 will still fall $2,630 short.

15. Montana

Livingston
Nick Fox / Shutterstock

Living wage: $69,128

Median income: $55,328

Minimum wage: $35,984

The sky isn’t the only thing that’s big in Montana. The state also has one of the largest disparities between the living wage and minimum wage.

Montana has the third-lowest minimum wage among the states on this list, leaving low-income parents more than $33,000 short of the living wage.

The Treasure State doesn’t live up to its name for families near the median income, either. They’ll bring home $13,800 less per year than they need — meaning it might be time to ask for raise or find a better-paying job.

On the other hand, residents won’t be house poor. Montana has the lowest annual housing costs on this list, averaging $10,000. Compare that to Hawaii at the top end with $22,314.

16. Hawaii

Honolulu
Izabela23 / Shutterstock

Living wage: $68,971

Median income: $80,212

Minimum wage: $42,016

Life in the Paradise of the Pacific doesn’t come cheap, as Hawaiians suffer from the highest housing costs in the country.

And while Hawaii’s minimum wage is almost three dollars more than the federal minimum, two parents earning that much will still fall almost $27,000 short of the living wage.

One benefit for families: Hawaii has the lowest child-care costs among states on this list by a huge margin. It also has one of the highest median household incomes at $80,212, more than $11,000 higher than the living wage. That’s one wave you definitely want to catch.

17. Minnesota

Minneapolis
f11 photo / Shutterstock

Living wage: $68,948

Median income: $70,315

Minimum wage: $41,600

Although residents do their best to be “Minnesota nice” in the Land of 10,000 Lakes, life isn’t kind to some low-income families. The annual income for two parents working full-time minimum-wage jobs is more than $27,000 below the living wage.

Getting to those jobs is expensive, too. According to MIT, Minnesota is tied with Illinois for the highest transportation costs on this list, coming in at a whopping $12,063 per year for a family of four.

Things are more encouraging for Minnesotans earning the median income or above; they’ll be able to stash away at least $1,300 per year after paying for their basic expenses.

18. Arizona

Tucson
Sean Pavone / Shutterstock

Living wage: $68,786

Median income: $59,246

Minimum wage: $49,920

The Grand Canyon State has a relatively high minimum wage of $12 per hour, and it’s going to remain relatively high for the foreseeable future. Starting in January 2021 it will begin increasing annually based on the cost of living.

That helps Arizona achieve this list’s second-smallest gap between the minimum wage and the living wage — though two low-income parents will still earn almost $19,000 less than they need to support themselves and their kids.

The median income isn’t all that much better, still $9,540 below the living wage, so frazzled families may want to make like a tumbleweed and roll to another state.

19. Vermont

Montpelier
Sean Pavone / Shutterstock

Living wage: $68,657

Median income: $60,782

Minimum wage: $45,594

Vermont is known as the Green Mountain State, and you’ll need a mountain of green to live there.

Two parents working full time on the current minimum wage of $10.96 will fall more than $23,000 short of the living wage. On the plus side, Vermont’s minimum wage increases in step with the country’s inflation rate, up to a maximum of 5%.

Even families earning the median income are feeling the pinch, as they’re bringing home $7,875 less than they need to live paycheck to paycheck. Like one of Vermont’s famous maple trees, most households’ bank accounts end up tapped.

20. Wyoming

Wyoming barn
Sharon Govender / Shutterstock

Living wage: $67,888

Median income: $61,584

Minimum wage: $30,160

Rounding out the bottom of the list is Wyoming, home to scenic mountains, rugged cowboys and the lowest minimum wage permissible by law.

Wyoming’s minimum wage matches the base federal rate of $7.25. Two parents earning that much per hour will bring home less than half the state’s living wage for a family of four.

Granted, MIT says it's still relatively cheap to buy a home in Wyoming — now's a good time to grab a mortgage while rates are low — but there are plenty of other factors driving up the cost of living in this Western state. Make sure you do the math before starting a home on the range.

About the Author

Shane Murphy

Shane Murphy

Reporter

Shane is a reporter for MoneyWise. He holds a bachelor’s degree in English Language & Literature from Western University and is a graduate of the Algonquin College Scriptwriting program.

You May Also Like

Take a Break From Your Debt This Month

Let debt consolidation give you a break.

The Cheapest States to Buy A Car In 2020

So, what is the cheapest state to buy a car?

What Is the Current Prime Rate?

The prime lending rate is a key interest rate that affects many other rates. See why it matters to you.

Money Market vs. Savings Account: Which Earns You More?

The real challenge is finding a place to store your money so that it grows fast enough.