Can Retail Workers Afford the Basics in Major U.S. Cities? The Data Says “No”

From stocking shelves to running registers, retail workers keep stores and the economy moving, especially during peak retail times like the holidays. Despite their essential role in keeping the country clothed, fed, entertained, and more, retail paychecks don't stretch far enough to cover basic needs in most major cities across the country.

But are there places where retail salaries can cover living expenses? Our research team at FinanceBuzz compared average retail wages in 75 of the biggest cities in America and all 50 states to the costs of living in those areas. Because there was a shortfall in most places we examined, we also identified the cities and states with the largest gaps between retail salaries and livable wages.

Key findings

• South Dakota is the only state where retail workers make a living wage.
  • Sioux Falls, South Dakota, is the only major city where retail workers earn a living wage.
• Across all 50 states and the District of Columbia, full-time retail workers make only 79.7% of a living wage. That equates to a shortfall of $9,732 annually.
  • Across 75 major U.S. cities, that number is 77.3%, or $11,288 annually.
• Retail workers in Hawaii earn an average annual salary of $41,488, while the living wage in that state is $62,233, resulting in a shortfall of $20,745. That is the biggest gap in the country and the only state with a difference of at least $20,000.
  • There are five different cities where the difference between retail salaries and the living wage is more than $20,000: San Jose, California ($23,904), Boston, Massachusetts ($21,712), Honolulu, Hawaii ($21,612), San Diego, California ($20,698), and Washington, D.C. ($20,217).

What is a "living wage" in America?

A living wage is a benchmark that estimates how much workers must earn to meet their basic needs and achieve financial stability in a given area, taking into account the local cost of living.

For this study, we utilized living wage data estimates for state and metropolitan areas, as published by the Massachusetts Institute of Technology's Living Wage Calculator. All data reflect the needs of a single adult living alone without children.

The Living Wage Calculator accounts for the following basic needs:

• Food: Cost of a nutritious, low-cost diet prepared at home.
• Health care: Average insurance premiums and out-of-pocket medical costs.
• Housing: Rent and utilities at the 40th percentile, from HUD data.
• Internet & mobile: Typical costs for home internet and cellphone plans.
• Transportation: Average expenses for vehicles, fuel, maintenance, insurance, and public transit.
• Civic engagement: Community and recreational costs, including education, hobbies, and local activities.
• Child care: Average center-based care costs (not included in our final calculations).
• Other necessities: Clothing, personal care, and household expenses

As an additional note, the retail salaries used throughout this analysis represent full-time workers putting in 40 hours on the job per week for 52 weeks per year.

Retail workers can't afford the basics in 49 of 50 U.S. states

Despite the importance of these retail jobs, there are almost no places in the country where retail workers can make enough money to cover their basic needs solely based on their retail salary.

Across the entire country, the average retail worker earns a little more than $38,000 annually, while the average living wage is slightly less than $48,000. This means that retail workers are, on average, more than $9,500 short of a livable wage, although the specific size of the wage gap varies from state to state.

Nationally, 49 states (plus Washington, D.C.) don't pay retail workers enough to afford the basics, a bleak statistic that reflects how challenging it is to live on retail wages alone, even for workers putting in 40 hours.

There is only one state in the entire country where retail workers earn enough to cover their basic living needs: South Dakota, where retail workers earn $42,302 annually. In South Dakota, a living wage covering basic needs such as food, housing, medical costs, transportation, entertainment, and utilities costs $41,081.

The biggest gap between retail earnings and a living wage is in Hawaii, where the average retail worker earns $41,488 per year, and the minimum living wage is $62,233, resulting in a raw salary shortfall of more than $20,000. Those totals mean that across the state, the average retail worker putting in 40 hours per week only makes 66.7% of what they need to afford the basics.

This isn't surprising, however, given that Hawaii's location away from the American mainland means shipping goods to the islands is more expensive, with those costs being passed on to Hawaiian consumers, which makes Hawaii's general cost of living one of the highest in the country.

States with the wage gaps for retail workers

After Hawaii, the largest difference between retail salaries and the living wage can be found in Georgia, where workers earn an average of $33,969, one of the five lowest totals in the country. That number is more than $15,000 short of the living wage in Georgia, meaning that retail salaries there don't even pay enough to cover 70% of the average person's basic needs.

Another state, Massachusetts, also pays retail workers less than 70% of the living wage, although the high cost of living, which creates a higher living wage, is a bigger culprit in Massachusetts than notably low wages.

States with the smallest wage gaps

As mentioned, South Dakota is the only state where retail workers earn more than the state's minimum living wage, while North Dakota and Michigan pay workers more than 90% of what they need on average. In addition to those three states, there are five others where workers make at least 85% of what they need to cover the basics: Vermont (86.3%), Maine (86.2%), Wisconsin (85.9%), Ohio (85.6%), and Minnesota (85.5%). Notably, of the 10 states where the gap between retail salaries and living wages is the smallest, eight are located in the Midwest.

Retail workers make less than a living wage in most major American cities

Cities tend to be more expensive places to live compared to more rural areas, which can make it even harder to afford basic necessities while working in retail. We examined 75 of the largest cities in America to identify where retail workers are experiencing the greatest disparity in earning a living wage.

Across these cities, there is only one place where workers make enough money to cover their basic needs. On the other hand, there are three different cities where the disparity between retail wages and the living wage is even more pronounced than it is across the entire state of Hawaii.

Sioux Falls, South Dakota, is the only city where retail employees make enough money to match the living wage in their city, as they make $43,456 on average and only need $41,386 annually to cover the basics, leaving workers in Sioux Falls with a surplus of a little more than $2,000 annually. Retail workers in Spokane, Washington, are the next closest to making it work without a second job, as the average retail salary in that city is enough to cover 97.3% of the living wage.

The city where the difference between retail pay and the living wage is largest is Atlanta, Georgia, a city where retail workers earn $35,453 per year but need $54,656 to meet their basic needs, resulting in a gap of $19,203. All told, retail wages in Atlanta make up less than 65% of the living wage in the ATL. Honolulu is nearly as bad, as retail salaries only cover 65.4% of what is needed to live there. In comparison, retail employees in Boston only make enough money to cover 66% of the living wage.

Cities with the biggest living wage gaps for retail workers

Of the ten cities where the difference between what retail workers earn and what they need to cover basic needs is the greatest, seven are located in cities on the East Coast, while three are located on the West Coast (counting Honolulu). That means that not a single city located in the middle of the country is near the top of the list when it comes to living wage gaps for retail employees.

Cities with the smallest living wage gaps for retail workers

Alternatively, many of the cities where retail pay comes closest to matching the costs of basic needs are located in the heart of the country. The only city where retail salaries actually exceed the living wage is located in the Midwest, and six other cities in the top 10 (Detroit, Toledo, Wichita, Milwaukee, Cleveland, and Cincinnati) are also found in that region of the country.

Full data

By state

By city

Tips for saving on your next trip to the store

With many workers on a budget, there are still plenty of ways to save money when shopping at your favorite retailers.

• Earn cash back for your next store run. Maximize your savings the next time you shop with a high-earning cash back card.
• Calculate your costs. Many shoppers and workers can benefit by setting a budget to account for rising retail costs, no matter their wage.
• Make every grocery run count. Enjoy benefits on pantry essentials, snacks, and more with one of these top credit cards for groceries.

Methodology

FinanceBuzz collected annual salary data for retail workers from the Bureau of Labor Statistics, using the most recently published reports (May 2024). Wage data was specifically collected for retail salespeople and excludes managers. BLS data for average annual wages is based on a full-time worker putting in 40 hours per week for 52 weeks a year, equating to 2,080 hours of work annually.

Living Wage Data comes from the MIT Living Wage Calculator. All living wage data used in this analysis are for a single adult living without children.

Pre-tax totals were used throughout.

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