How much do you need to earn to live in Kentucky? Here’s the living wage in 2025
Kentucky’s minimum wage is less than half what a Lexington resident needs to afford basic necessities, according to the latest data from the Massachusetts Institute of Technology’s living wage calculator.
The commonwealth’s minimum wage is the same as the federal minimum, at $7.25, and has been for 16 years. A single adult without children needs to make more than twice this amount to afford basic necessities in Lexington. The tipped minimum cash wage in the commonwealth is $2.13 an hour.
The Bluegrass State’s minimum wage has not increased since 2009, when the federal minimum wage increased. Inflation has since reduced the minimum wage’s purchasing power by 40%, the Kentucky Center for Economic Policy reported in July 2023.
Kentucky’s statewide minimum livable wage is $19.40 for a single adult without children, according to MIT’s calculator. The living wage is calculated to be hourly figure an individual needs to make to afford the basic necessities.
The cost of living in Kentucky increased by 22% from January 2020 to December 2024, Dustin Pugel, policy director at the Kentucky Center for Economic Policy, wrote in a Jan. 28 email to the Herald-Leader. Food costs increased by 27% over the same period and housing costs increased by 26%.
“It was already difficult to get by in Kentucky prior to the pandemic, and while wages have risen in recent years, particularly for those in low-wage jobs, it remains hard to gain a stable financial footing in Kentucky,” Pugel said.
Additionally, inflation has reduced the minimum wage’s purchasing power by 47% since it last increased, Pugel said. If the minimum wage had kept up with inflation, it would be $10.63 now, he added. The tipped minimum wage was designed to be half of the minimum wage in 1996, and hasn’t kept up with the standard minimum wage.
The national cost for all items is up 2.9% over the past 12 months, according to the U.S. Bureau of Labor Statistics. Food costs are up 2.5% over the same period, while energy services are up 3.3%.
Housing costs are up 4.6% across the nation, the federal agency reports, and the median rent price in Kentucky is $1,346, popular housing site Zillow reports. The rent calculation includes all property types and sizes for rental properties listed on the site.
A Kentucky resident would need to work 116 hours per week at the minimum wage to be able to afford a typically priced, two-bedroom rental home, according to the National Low Income Housing Coalition. For a one-bedroom rental, someone working for the minimum wage would need to clock 94 hours each week, the NLIHC reports. An “affordable rent” for someone working 40 hours a week at the minimum wage would be just $377, far below average prices, the organization says.
The average gas price in Kentucky is $2.764 per gallon as of Jan. 27, according to auto club AAA. Fuel is one of the few categories that’s seen price relief in recent months.
Kentucky has seen some forms of economic relief recently, similarly to the rest of the nation.
“The labor market is strong, wages are rising, inflation has substantially cooled, and the Federal Reserve has begun cutting interest rates which will help make things like mortgages more affordable,” Pugel said.
But federal policies related to immigration, high tariffs and potential cuts to Medicaid and food assistance programs could upend some of that progress, he continued.
“Immigrants make up 5% of our workforce as a state, including 12% of construction workers and 16% of physicians – so mass deportations, a reduction in legal immigration, and the chilling effect of anti-immigrant rhetoric could reduce our workforce in critical sectors and make those goods and services more expensive,” Pugel said.
With $86 billion in imported foreign goods from January 2024 to November 2024, Kentucky is the 12th-largest state for imports in the U.S., Pugel said. Much of that is related to the state’s auto manufacturing industry.
“If import goods become more expensive and demand slips, it will hurt those industries that heavily rely on them,” Pugel said. “Depending on the severity of the tariffs it could range from a slowdown in hiring to mass layoffs, and certainly higher prices for Kentuckians who purchase those products.”
What’s a living wage in Fayette County?
Here’s how the living wage breaks down in Lexington and Fayette County by household size, according to MIT:
$19.39 for a single adult with no children
$33.63 for a single adult with one child
$41.76 for a single adult with two children
$13.93 each for two working adults and no children
$18.98 each for two working adults and one child
$23.53 each for two working adults and two children
Lexington’s living wage for a single adult without children has increased by $3.52 per hour since December 2022, or $7,321.60 per year for someone working 2,080 hours annually. The MIT living wage in Lexington in 2022 was $15.87, the Herald-Leader previously reported.
Here’s how the living wage for a single adult with no children compares in a few nearby counties:
Scott County: $20.56
Woodford County: $19.86
Jessamine County: $19.58
Madison County: $19.12
Clark County: $18.82
Do you have a question about the Kentucky economy for our service journalism team? We’d like to hear from you. Email ask@herald-leader.com or fill out our Know Your Kentucky form.
This story was originally published January 28, 2025 at 5:50 AM.
