SOME CARD INFO MAY BE OUTDATED
This page includes information about these cards, currently unavailable on NerdWallet. The information has been collected by NerdWallet and has not been provided or reviewed by the card issuer.
Updated on Jan 6.
On Jan. 1, 2026, the minimum wage increased in 19 states. See those increases and additional future increases below.
The federal minimum wage of $7.25 per hour has not budged since 2009 despite a steady increase to the costs of living, which has accelerated into skyrocketing inflation in recent years.
As of Jan. 1, 2026, 31 states and Washington, D.C., have minimum wages set above the federal minimum.
Minimum wage over time
The minimum wage has not kept pace with inflation when you look at nominal wages (not adjusted for inflation) versus their spending power in 2023 numbers (adjusted for inflation).
Because the federal minimum wage has not changed since 2009, its real purchasing power has decreased dramatically. Decreased purchasing power means it’s even more difficult for workers to live on a minimum wage.
State minimum wages in 2026
The minimum wage varies by state. Five states have no minimum wage laws, but the federal minimum wage still applies; those include Alabama, Louisiana, Mississippi, South Carolina and Tennessee. In certain states, the minimum wage is more, depending on whether a particular city or region within that state sets a higher minimum.
Does raising the minimum wage cause inflation?
No. The federal minimum wage is set by the government and does not directly correlate with inflation. The current inflationary conditions were not caused by the minimum wage, which has not changed since 2009.
Meet MoneyNerd, your weekly news decoder
So much news. So little time. NerdWallet's new weekly newsletter makes sense of the headlines that affect your wallet.
Do all workers earn at least the minimum wage?
All workers covered by the Fair Labor Standards Act must be paid at least the federal minimum wage and may earn more if the state minimum wage is higher.
According to the Department of Labor, workers not covered by the FLSA, who may earn less than minimum wage, include:
- Employees of certain seasonal amusement or recreational establishments.
- Employees of certain small newspapers or newspaper delivery workers.
- Seamen employed on foreign vessels or employees engaged in fishing operations.
- Certain farmworkers.
- Casual babysitters.
- Companions to older people or the infirm.
- Executive, administrative and professional employees.
Those workers are also exempt from overtime pay. (Learn more about who is — and isn’t — eligible for overtime pay on the Department of Labor website.)
Do tipped workers earn the minimum wage?
Tipped employees rely on tips from customers to supplement their wages. They must be paid a minimum of $2.13 per hour — known as a cash wage — in addition to tips in order to reach the federal minimum of $7.25. Learn more about minimum wages for tipped workers.
What states are increasing minimum wages in 2026?
Each year, 14 states plus Washington, D.C., automatically set minimum wage increases according to the growth of inflation, usually tied to the U.S. Bureau of Labor Statistics’ consumer price index, or CPI. If the index doesn’t change, neither does the minimum wage. And some states have annual caps on annual inflation increases, such as California (3.5%), Minnesota (2.5%) and Vermont (5%).
States that tie minimum wage increases to inflation adjust their wages as of Jan. 1, unless otherwise listed, according to the Economic Policy Institute. Those states include:
- Alaska
- Arizona
- California
- Colorado
- Connecticut
- District of Columbia (adjusts July 1)
- Maine
- Minnesota
- Montana
- New Jersey
- New York
- Ohio
- Oregon (adjusts July 1)
- South Dakota.
- Vermont
- Washington
» MORE: Is the pay gap real?
What is the median household income in the U.S.?
The median household income in the U.S. is $74,580, according to the U.S. Census Bureau Current Population Survey data for 2022. Find out the median household income in your area.
Article sources
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
standards for journalism by reading our
editorial guidelines.
