Which States Are the Richest, Poorest, and Have the Best Economies

Income and Net Worth by State

states with best economies
••• Photo: Thomas Barwick/Getty Images

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 2016, the richest states was Maryland. Its median household income was $78,945. In Mississippi, the poorest state, it was $41,754. Both are significantly different from the national average of $59,039. 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 well within the middle-class. The Pew Research Center defines middle class income as being between 67 percent and 200 percent of median household income.

As a result, households making less than $39,554 are low income, while those earning more than $118,072 are high income. 

Top 10 Richest States

Here are the top 10 richest states in 2016. The number reported is for median household income. If you want to live in these states, your'e better off making more than the median.

The cost of living is also higher in these states. 

  1. Maryland - $78,945. 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 $75,506. 
  2. Alaska - $76,440.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.
  3. New Jersey - $76,126. This is a bedroom community to New York City.
  4. Massachusetts - $75,297. This state has a concentration of top universities and business schools. As a result, it has a flourishing technology sector, especially computers and electronics. Its education and health services employ the most people.
  5. Hawaii - $74,5118.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. 
  6. Connecticut - $73,433. The state is a bedroom community to New York City.
  7. New Hampshire - $70,936. Another bedroom community to Boston.
  8. Virginia - $68,114. A bedroom community to Washington D.C. 
  9. California- $67,739. 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.
  1. Washington - $67,106. 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.

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. Since 1998, the number of cotton farms has fallen by half. Demand has fallen as consumers have turned to synthetics. Tobacco use has fallen due to declines in smoking rates.

The South doesn't have a lot of manufacturing. These industries create more jobs than farming or real estate. In fact, manufacturing jobs are some of the highest paid in America. 

Rank StateMedian Income (2016) Comments
41South Carolina$49,501

 

Dependence on agriculture

42Oklahoma$49,176
43Tennessee$48,547
44New Mexico$46,748
45Kentucky$46,659
46Alabama$46,257
47Louisiana$45,146Oil
48Arkansas$44,334Coal
49West Virginia$43,385Agriculture
50Mississippi$41,754

Fastest Growing States

Which states have the best economies and job markets? There's not a one-size-fits-all answer to that question. For example, many of the states with the fastest-growing economies did so for reasons that might not get you a job. Four out of the 10 owed most of their growth to real estate and construction. That's great only if you have those skills. 

You might have better luck in Minnesota, Michigan, and New Hampshire. Those states' economies are driven by business growth. You would benefit if you had office or sales skills. Here are the growth rates for the 10 best performing states.

State2016 Growth Rate Top Growth Industry
Florida2.4%Real Estate
Michigan2.2%Business
District of Columbia2.1%Government
Minnesota2.1%Business
Hawaii1.9%Real Estate
North Carolina1.9%Real Estate
South Carolina1.8%Real Estate
Iowa1.6%Agriculture
Maine1.6%Trade
New Hampshire1.6%Business

 

Top 10 Best States to Find a Job

Here are the 10 best states to find a job. Arizona has four cities that rank as the easiest to find jobs. These communities are adding many jobs. California is second, with two job-abundant cities. Many of these cities are in the fastest-growing states in the list above.

  1. Arizona: Chandler (#1), Scottsdale (#2), Peoria (#4), Gilbert (#5).
  2. California: San Francisco (#3), Irvine (#8)
  3. Texas: Plano (#6), Austin (#11) 
  4. Maine: Portland (#7)
  5. Wisconsin: Madison (#9)
  6. Massachusetts: Boston (#10)
  7. North Dakota: Fargo (#12), Bismarck (#14)
  8. Florida: Orlando (#13), Tampa (#16)
  9. Maryland: Columbia (#15)
  10. Washington: Seattle (#17)

In Depth: Median Income per Person | Average Net Worth