Comparing America's richest states to its poorest ones reveals the nation's income inequality. Six of the 10 richest states are near a major U.S. East Coast city. They benefit from having major, world-class research universities. As a result, highly educated people live in those cities. There is a high correlation between education and income.
Eight of the poorest states are in the South, an area dependent on agriculture. The South used to have many textile and clothing manufacturers that were located near cotton fields. Foreign countries could make the products more cheaply, despite being further away from the raw materials. As a result, China and India took these higher-paying jobs.
The comparison between the richest and poorest states is striking. In 2018, the richest state was Maryland. Its median household income was $83,242. In West Virginia, the poorest state, it was $44,097. Both are significantly different from each other and the national average of $61,937.
The median income is the point where half the people make more and half make less. A household is any group of people who live together according to the United States Census.
Despite their discrepancy, both averages are within the middle-class. The Pew Research Center defines middle-class income as being between 67% and 200% of the nation's median household income. As a result, households making less than $41,498 are low income, while those earning more than $123,874 are high income.
Top 10 Richest States
Here are the top 10 richest states based on U.S. Census data from 2018. The number reported is for median household income. The wealthier states also have better education scores.
If you want to live in these states, you're better off making more than the median. The cost of living is also higher in these states.
- Maryland ($83,242): The nation's richest state is a bedroom community for the fourth richest city, Washington D.C. The median income for the District of Columbia is $85,203.
- New Jersey ($81,740): This is a bedroom community to New York City.
- Hawaii ($80,212): The island state depends on tourism from the mainland and Japan. It also benefits from a military base, and exports of sugar, molasses, and pineapple.
- Massachusetts ($79,835): This state has a concentration of top universities and business schools centered around Boston. As a result, it has a flourishing technology sector, especially computers and electronics.
- Connecticut ($76,348): The state is a bedroom community to New York City.
- New Hampshire ($74,991): A bedroom community to Boston.
- Alaska ($74,346): The northern-most state benefits from oil reserves in Prudhoe Bay. It also depends on tourism, which attracts 1.1 million visitors a year. Wild seafood, especially salmon, is another significant contributor. Alaska also has a universal guaranteed income. That spurs spending and economic growth.
- California ($75,277): If it were a country, California would have the world's sixth-largest economy. It's buoyed by the world's densest concentration of high tech companies in Silicon Valley. It also exports dairy products, vegetables, grapes, almonds, and cattle.
- Washington ($74,073): This northwestern state has the nation's largest concentration of STEM (science, technology, engineering, and math) workers. It follows California in the most patents filed. It also has no personal income tax.
- Virginia ($72,577): A bedroom community to Washington D.C.
10 Poorest States
Most of the nation's poorest states are in the South. They struggle because they have historically been reliant on agriculture, especially cotton and tobacco. Demand has fallen as consumers have turned to synthetics. Tobacco use has fallen due to declines in smoking rates.
|Rank||State||Median Income (2018)||Comments|
|41||Tennessee||$52,375||Dependence on agriculture|
|42||South Carolina||$52,306||Dependence on agriculture|
|43||Oklahoma||$51,924||Dependence on agriculture|
|44||Kentucky||$50,247||Dependence on agriculture|
|45||Alabama||$49,861||Dependence on agriculture|
|47||New Mexico||$47,169||Dependence on agriculture|
Fastest Growing States
Here are the growth rates for the 10 best-performing states.
|State||2019 Growth Rate|
Top 10 Best States to Find a Job
Here are the 10 best states to find a job. California and Arizona each have four cities that rank as the easiest to find jobs, while Texas has two. Many of these cities are in the fastest-growing states in the list above.
- Vermont: South Burlington (#1)
- Arizona: Scottsdale (#2), Chandler (#8), Tempe (#14), Gilbert (#16)
- California: San Francisco (#3), Fremont (#4), San Jose (#9), Plano (#17)
- Massachusetts: Boston (#5)
- Texas: Austin (#6), Irving (#13)
- Hawaii: Pearl City (#7)
- Maine: Portland (#10)
- Alabama: Huntsville (#11)
- Florida: Orlando (#15),
- South Carolina: Charleston (#18)
U.S. Census Bureau. "Household Income: 2018," Table 1. Median Household Income and Gini Index in the Past 12 Months by State and Puerto Rico: 2017 and 2018." Accessed August 12, 2020.
Pew Research Center. "Are You in the American Middle Class? Find Out With Our Income Calculator." Accessed August 12, 2020.
Hawaii.gov. "What Are the Major Industries in the State of Hawaii?" Accessed August 12, 2020.
World Economic Forum. "California Is Now the World's Sixth Largest Economy." Accessed August 12, 2020.