Oct 20, 2021

Interactive: Does a state's cost of living impact the minimum wage set by that state?

While the Federal minimum wage of $7.25 hasn’t changed since July 2009, many states have gone ahead and independently made changes to their minimum wage levels. This interactive from Flowing Data shows the progression of these changes from 2008-2019. 

When it comes to the minimum wage, states fall into four different classifications: 

  1. States with higher minimum wage than Federal 
  2. States with same minimum wage as Federal
  3. States with lower minimum wage than Federal (Federal applies)
  4. States with no minimum wage (Federal applies)

Note: If you want to bolster your content knowledge on the minimum wage, check out NGPF's On-Demand: $7.25 - The Minimum Wage

Interactive description: This interactive plots each state on a 2 X 2 matrix with a state’s cost of living factor (a.k.a Regional value of $100) on the X axis and its minimum wage on the Y axis. Taking the District of Columbia as one example, while they had one of the highest minimum wages of $14 in 2019, they also had one of the highest costs of living. This high cost of living is represented by D.C. having a regional value of a dollar of about $85 vs. a national average of $100. In short, a dollar doesn’t go as far in D.C. as it does in an average U.S. state. You can read more about this concept of Regional Price Parity as a gauge of cost of living differences on the interactive webpage. 

Here are a few questions you can ask after students engage with the interactive:

  • As you watch the interactive progress from 2008 to 2019, what changes do you notice in the minimum wages set by states?
    • In 2008, how many states had minimum wages greater than the Federal minimum wage?  
    • By 2019, how many states had minimum wages greater than the Federal minimum wage?
    • Why do you think that states made these changes?
  • What is the relationship between minimum wage and cost of living in states? Complete this sentence: A state with a __________ cost of living is likely to have a _________ minimum wage.
  • Which of the four quadrants (upper left, lower left, upper right, lower right), do you think is best for an employee in a minimum wage job. Are there specific states that seem to be in this “sweet spot?”

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This could serve as an ideal supporting resource or hook for the following NGPF lessons/activities: 

About the Author

Brian Page

Making a difference in the lives of students through financial capability is Brian’s greatest passion. He comes to NGPF after fifteen years of public school teaching where he was the ‘11 Ohio Department of Education recipient of a Milken National Educator Award, the CEE Forbes Award winner, and a Money Magazine/CNN "Money Hero". He served on the working group for President Obama's Advisory Council on Financial Capability. He has private school experience as a Trustee for the Cincinnati Country Day School and was a past Ohio Jump$tart President. Brian holds a BBA and M.Ed. When Brian isn’t working alongside his NGPF teammates he is likely spending time with his wife, three children, and dog; hiking, or watching Ohio State football.

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