Kentucky is facing a major challenge when it comes to wages. The state’s minimum wage, which has remained at $7.25 for the last 16 years, is not enough for most people to afford the basic needs of living, especially in cities like Lexington. According to new data from the Massachusetts Institute of Technology (MIT), the living wage in Kentucky has risen significantly due to rising costs for food, housing, and other basic needs.
Kentucky’s Minimum Wage vs. Living Wage
The minimum wage in Kentucky is $7.25 an hour, which is the same as the federal minimum wage. However, this amount is far less than what a person needs to cover everyday expenses. For a single adult without children, the MIT calculator shows that the living wage in Lexington is $19.40 an hour. This is nearly three times more than the state’s minimum wage, making it difficult for those working minimum wage jobs to make ends meet.
The minimum wage has not increased since 2009, and inflation has made it even harder for people to live on such low wages. According to the Kentucky Center for Economic Policy, inflation has reduced the purchasing power of the minimum wage by 40%. If the minimum wage had increased with inflation, it would be about $10.63 an hour today, instead of $7.25.
Costs of Living in Kentucky
Over the past few years, the cost of living in Kentucky has grown steadily. From January 2020 to December 2024, prices for food went up by 27%, while housing costs increased by 26%. This means that people in Kentucky are paying a lot more for essentials like groceries and rent.
In Kentucky, the average cost of rent for a two-bedroom home is about $1,346 per month. For someone earning the minimum wage of $7.25 an hour, they would need to work 116 hours a week to afford a two-bedroom rental. For a one-bedroom rental, it would take 94 hours of work per week. In contrast, a person working 40 hours per week at the minimum wage can only afford a rent of about $377 per month, which is much lower than the actual rent in most places in the state.
Impact of Rising Costs
As the cost of living continues to rise, many Kentuckians are struggling to keep up. Food, housing, and transportation have become much more expensive. For example, the average gas price in Kentucky is currently about $2.76 per gallon, but this price can change quickly, adding to the financial pressure on residents.
In response to these rising costs, some parts of Kentucky have seen an increase in wages, especially in low-wage jobs. This increase in wages has helped some people, but it has not been enough to offset the sharp rise in costs. The Kentucky Center for Economic Policy also notes that inflation has slowed down in recent months, and this has provided some relief, but it’s unclear how long this will last.
The Living Wage Breakdown in Kentucky
According to MIT’s living wage calculator, here’s a breakdown of the wages needed to afford basic necessities in Lexington and other nearby counties:
- Single adult with no children: $19.39 per hour
- Single adult with one child: $33.63 per hour
- Single adult with two children: $41.76 per hour
- Two working adults with no children: $13.93 per hour per adult
- Two working adults with one child: $18.98 per hour per adult
- Two working adults with two children: $23.53 per hour per adult
This information shows the high cost of living for families and individuals, and how much wages would need to rise to meet these costs.
What Needs to Change?
Kentucky has a long way to go before its minimum wage can support the cost of living. Many workers are still finding it difficult to make ends meet, even as the state’s economy has improved in some areas. Rising wages in some sectors have helped, but many Kentuckians are still struggling with high costs.
If the state raises the minimum wage to match the living wage, it could help workers achieve a more stable financial future. But with inflation and rising costs continuing to put pressure on families, the state may need to consider more long-term solutions to make living more affordable for everyone.
(Source : newsbreak.com)
