As we move into 2026, millions of American workers are experiencing changes in their paychecks, thanks to some minimum wage increases across the country. While the federal minimum wage remains frozen at a disgraceful $7.25 per hour—unchanged since 2009—some states and localities are taking matters into their own hands, raising wage floors to help workers keep pace with the rising cost of living.
The Federal Stalemate
The federal minimum wage has been stuck at $7.25 since 2009; adjusted for inflation, this translates to significantly less purchasing power than it did 16 years ago. The federal minimum wage has eroded in value by more than 30% over the past 15 years. Despite this stagnation, 20 states continue to use the federal rate because they either have no minimum wage laws of their own or set rates below the federal floor. Basically, ignoring the real-world needs of their own constituents.
A Sad Scenario
Let’s take a look at what that means for many working families. Common household expenses include food, rent, transportation, utilities, and health care. And childcare for some – so the parent(s) can go to work.
The federal minimum wage has eroded in value by more than 30% over the past 15 years.
With one wage-earner in the family — working 40 hours a week at $7.25 an hour – the family’s weekly income would be $290.00 or $1160.00 a month. With two wage-earners, the family income would balloon to a whopping $580.00 per week or $2320.00 per month.
Groceries for the Week
Now let’s look at what that means for the family’s food. I constructed a weekly shopping cart with healthy items from basic food groups, inclusive of sales and store brands. Then I checked prices at my local Stop and Shop. Here’s what I put in my cart. Preferences vary, so your cart might look different, but this will give you an idea.
- Fruits and Vegetables:
- 5 Gala apples (49 cents each): $2.45
- Bananas (1 bunch; 4-5) $1.66
- 2 lb bag of Halos mandarins/tangerines – $5.99
- 2 lb bag of whole carrots – $2.49
- Romaine lettuce (3 count pkg) – $2.99
- Spinach (9 oz bag) – $2.50
- Green beans (12 oz bag) – $2.50
- Tomatoes (4): $2.99
- Grains:
- Brown rice (16 oz bag): $.99
- Pasta (16 oz bag of spaghetti): $.99
- Bread (16 oz pkg of whole wheat): $2.49
- Cereal (1 box Cheerios): $1.99
- Protein:
- Ground turkey (1 lb): $5.99
- Chicken (1.5 lbs. thighs): $8.24
- Chicken breast cutlets (1lb): $5.49
- Eggs (1 dozen): $3.49
- Canned tuna (chunk light in water): $1.19
- Canned kidney beans (2 cans): $1.76
- Dairy:
- Milk (1 gallon): $4.29
- Butter (16 oz box; 4 sticks) $3.99
- Yogurt (32 oz low fat): $2.99
- Cheese (8 oz sliced white): $3.25
- Snacks and Miscellaneous:
- Peanut butter (16 oz): $2.49
- Crackers (14 oz box of wheat thins): $5.49
- Canned soup (2 cans tomato soup): $2.38
TOTAL: $81.03 per week or $324.12 per month.
Many financial advisors recommend that around 10-15% of monthly income should be allocated to groceries. Assuming one minimum wage earner allocates 10% of his/her monthly income to groceries, that leaves about $835.00 for everything else — rent, utilities, transportation, and childcare. And a fervent hope that no one gets sick, needs meds, or has to see a doctor.
A Wave of State and Local Action
In response to federal inaction, some states and municipalities have stepped up. Nineteen states raised their minimum wages on January 1, 2026, benefiting over 8.3 million workers. The increases varied in size and rationale. Some states made modest cost-of-living adjustments tied to inflation, while others continued multi-year phase-ins designed to eventually reach $15 or higher.
Notable examples of 2025 increases include:
California continues to lead with one of the highest statewide minimum wages in the country, rising to $16.90 in 2026. The state also maintains a specialized minimum of $20 per hour for fast food workers at large chains, established in 2024.
Washington, D.C. adjusted its minimum wage to $17.95 per hour in July 2025, reflecting annual changes based on the Consumer Price Index.
In response to federal inaction, some states and municipalities have stepped up.
New York increased wages to $17.00 per hour for New York City, Nassau County, Suffolk County, and Westchester County in 2026.
Michigan experienced dramatic changes in early 2025 following a Michigan Supreme Court ruling. The state’s minimum wage jumped to $12.48 per hour on February 21, 2025, with further increases planned to reach $15 by 2027.
Colorado raised its minimum wage to $15.16, with individual cities like Boulder implementing even higher local wage floors of $15.57 in 2025, climbing to $18.17 by 2027.
Beyond $15: The New Frontier
The “Fight for $15” movement, which began in 2012, successfully pushed many states to adopt $15 minimum wages. However, as inflation has continued to erode purchasing power, advocates and policymakers are now setting their sights higher. Six states and 60 cities and counties will have surpassed a $15.00 minimum wage for some or all employees by the end of 2025, including 2 states and 51 localities which will reach or surpass $17.00 (see here).
Some localities are pushing the envelope even further. Burien, Washington enacted the highest wage floor in the nation in 2025, requiring large employers to pay $21.16 per hour. Meanwhile, hospitality workers in Los Angeles are poised to gain a $30 minimum wage by 2028, though there is some strong opposition.
The Gap Between Minimum and Living Wage
But here’s the rub. A $15 minimum wage does not achieve economic security for working people in most of the country, particularly in high-cost metropolitan areas. The Economic Policy Institute’s Family Budget Calculator reveals significant gaps between minimum wages and the income needed for a modest standard of living in many cities. That’s why we need to focus on a Living Wage.
A living wage is the minimum income someone needs to afford basic necessities —things like housing, food, transportation, healthcare, and other essential expenses. It’s different from the minimum wage, which is just the legal floor set by government.
A living wage should allow someone working full-time to meet their basic needs without having to work multiple jobs or rely on government assistance. It varies significantly by location since the cost of living in San Francisco is very different from rural Iowa, for example. Check out the MIT Living Wage Calculator to see the local wage rate that a full-time worker requires to cover the costs of their family’s basic needs where they live.
To my knowledge, no U.S. state currently requires private employers to pay a living wage across the board. Some employers voluntarily commit to paying living wages, and some local governments set wage requirements for city contractors.
Bottom Line
The trend toward higher minimum wages is a positive sign. The proposed Raise the Wage Act of 2025 would increase the federal minimum wage to $17 by 2030. According to Economic Policy Institute estimates, this federal change would affect 22.2 million workers, providing an additional $70 billion annually in wages. But it’s a pretty paltry and insufficient increase that surely won’t meet the cost of living four years from now.
Our nation’s workers deserve more than the minimum. They are the bedrock of our economy; they keep our nation running. They need and deserve wages that reflect the true cost of living in their communities, especially at a time when rising prices are particularly punishing for the lowest earners. Surely, no one can argue with that. Our policymakers need to step up and respond with increasingly ambitious targets. While the federal government remains gridlocked, the laboratory of democracy at the state and local level is actively experimenting with solutions to ensure that workers make a living wage. That is democracy at its best.