Personal Finance

Living on minimum wage is possible in these 13 cities — but barely

Key Points
  • Workers in Tuscon will have the highest annual surplus of about $8,700 — which doesn't amount to a lot of wiggle room.
  • Two other Arizona cities, Mesa and Phoenix, also fell within GOBankingRates' top 10 list.
  • The Grand Canyon State has a relatively high minimum wage, but it's not necessarily in your best interest to move there.
McDonald's worker prepares french fries to go.
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Minimum-wage workers face financial struggles no matter where they live — but some cities are more affordable than others.

High housing costs put renting a two-bedroom apartment out of reach for minimum-wage workers in any U.S. state, according to the National Low Income Housing Coalition. In only 1 of 12 counties can a full-time minimum-wage worker afford the rent for a one-bedroom apartment, they estimate.

To determine where someone can realistically live off the minimum wage, personal finance website GOBankingRates researched the median rent for one-bedroom apartments in 100 of the most populous U.S. cities. They also looked at costs of groceries, utilities and transportation for those metro areas.

The study isn't a full picture — it doesn't take into account federal or state taxes, and it assumes the employee will work 40 hours per week for 52 weeks without a break.

Even so, only 13 metros made the cut:

Tucson topped the list. GOBankingRates estimated that a resident earning the minimum wage in the city ($10 an hour) would have an annual surplus of about $8,700 — which still isn't a lot to work with to meet other goals like paying off debts or saving for retirement.

Residents will be able to cover the most necessary expenses, but there's not a lot of wiggle room, said Mark Evitt, features editor for GOBankingRates.

Two other Arizona cities, Mesa and Phoenix, also fell within the top 10.

Despite the Grand Canyon State's relatively high minimum wage ($2.75 above the federal minimum wage), relocating isn't necessarily in a worker's best interest.

"Moving costs are high and ... making changes like that is really difficult," Evitt said.

There are, however, other steps low-wage workers should consider. Take a hard look at your budget to see where there may be opportunities to trim costs, he said.

"Small amounts of money makes a big difference. Little tweaks can go a long way," Evitt said.

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But it's not all on employees. On the city level, local governments should work to make sure that rent is affordable and public transportation is accessible, he said.

"The thing that's the most direct is raising wages," Evitt said.

On Jan. 1, 2018, 19 states and the District of Columbia will increase the statutory minimum wage by amounts ranging from 35 cents to $1. That will provide more than $5 billion in additional wages to 4.5 million workers across the country, according to the Economic Policy Institute.

This advancement couldn't come soon enough. A single worker will soon need to earn at least $15 an hour just to afford the basics, according to recent research by the National Employment Law Project.

"A little bit of a wage increase can go a long way," Evitt said.