I heard on the news that lots of states now have higher minimum wages. Should I quit my entry-level job and move to one of these states to make more money?
Dear, Show Me the Money,
It is true that there have been a number of states, as well as cities, who have adopted legislation raising their minimum wage above the Federal mandate. Eleven states increased their minimum wages in 2014, and as of January 1, 2015 nine more states joined them — for a grand total of 29 states with higher than the current $7.25 federal minimum wage. Some states have scheduled increases, stepping it up gradually. See the list by state.
Before giving your notice, do your homework. Moving to another state is a big step, especially if you don’t have a support system of family and friends in your new hometown. There may be a period of unemployment while settling in, unless you are fortunate enough to work for a large company where transferring to another location is an option. Are you financially prepared with a cushion of savings for a transition period with no income?
Speaking of budgeting, the cost of living in a potential city should be a deciding factor. For instance, while San Francisco’s $11.05 hourly pay rate is higher than the minimum wage for most of California and the U.S., you’ll shell out a whole lot more of your paycheck in the city by the bay. Numbeo has a useful online cost of living comparison tool that can open your eyes to things you might not think about, like the difference in your monthly utilities or the cost of chicken breasts at the supermarket. State income taxes vary, too, from no state income tax in six states like Texas, to the highest rate of 13.3% in California. This calculator at WhyNotMove.org uses the difference in various taxes (including property and sales tax) to show you how much you will gain – or lose – by moving to another state.
Change – even for the good – is always stressful. If and when you do find a new job, you’ll be the “new guy” both at work and in your personal life, hundreds or thousands of miles away from your former home. Depending on your personality type, this can be the beginning of an exciting adventure or an overwhelming transition.
There are other ways to increase your earning potential, no matter where you live. Further your education, whether through college, a company training program (ask your supervisor about opportunities), or free and low-cost courses on the Internet. See my Back to Class post. Just going the extra mile at your current job can be a pathway to promotion and increased wages.
Readers: Would you move to another state to make better wages?
Do you have a job-related question? Ask Anita.
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