NC Minimum Wage Covers Just 32% of Living Costs

Employers paying the $7.25 state minimum should expect tight competition for entry-level workers as the gap persists.

Updated on Nov. 4, 2026 in Employment

Flat-color editorial illustration of a steel balance scale with one heavy pan of milk cartons sagging against a light pan, set on a dock under a pale sky. — Employers paying North Carolina's $7.25 minimum wage take home just 32% of the local living wage, ranking the state 45th nationally in a SmartAsset study published November 4. AI Illustration. Upload story photo >

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Should North Carolina raise its minimum wage above $7.25 per hour?

SmartAsset ranked North Carolina No. 45 in the nation for minimum wage sufficiency in a study published November 4, 2026, evaluating the purchasing power of state minimum wages across all 50 states. Workers earning the state's $7.25 hourly minimum take home 32% of the local living wage, and operators in low-wage sectors should note the gap.

Why it matters

The ranking measures how far a full-time minimum wage paycheck stretches against local living costs, which bears directly on hiring and retention for employers paying at or near the floor. Rising living costs are cited as an ongoing pressure on lower-income residents, meaning wage competition for entry-level workers in the state is likely to stay tight.

North Carolina's full-time minimum wage earnings total $15,080 a year against an estimated living wage of $46,738 and median income of $49,098. The state's Kaitz index of 31% places it far below Missouri, which ranks first nationally with 71% of living wage covered.

The players

SmartAsset

A personal finance technology company that publishes consumer financial research and calculators.

The details

The study measures sufficiency by comparing what a full-time worker earning the state minimum actually takes home with the estimated local living wage. At $7.25 per hour, a North Carolina worker's annual minimum wage income is $15,080, roughly 32% of the $46,738 living wage. Operators paying the federal-floor rate should understand that their wage levels sit well below the local cost-of-living benchmark used in this ranking.

November 4, 2026: SmartAsset publishes the minimum wage sufficiency study.

Market Landscape

The Kaitz index, a ratio of the minimum wage to the median wage long used in federal minimum wage analysis, gives North Carolina's 31% figure a comparable benchmark. Placing the state at No. 45 nationally shows how far its wage floor trails states like Washington, which starts at $17.13 per hour by nominal value.

Operators in North Carolina who pay at the minimum wage should review entry-level compensation against the local living-wage benchmark, since recruiting and retention pressure is likely to persist. Businesses competing for the same workforce in Missouri and Washington face different wage floors, so regional pay strategy may need to account for that gap.

The takeaway

Compare your entry-level pay against the local living-wage estimate before the next hiring cycle, and track the state's minimum wage and labor supply data as conditions develop. Consult a qualified employment attorney or accountant before changing pay structures, since wage compliance decisions carry legal consequences.