10 States Where Residents Have the Highest Income Levels in the Country
Income disparity is a major problem in the United States, especially as the gap between the wealthiest and poorest Americans grows wider. Research from the Urban Institute found that in 1963, the wealthiest U.S. families had 36 times the wealth of families in the middle of the wealth distribution. By 2022, they had 71 times the wealth of families in the middle. The gap is even wider for poor Americans.
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This disparity trickles down to the state level as well. A new study from WalletHub analyzed each state and the District of Columbia to determine the earnings differential between residents in the highest and lowest income brackets. In all cases the difference amounts to at least $300,000 a year – and in some cases it’s much more than that.
But some states do a better job than others at ensuring that poor residents at least earn enough money to fall into abject poverty.
“The highest-earning 10% of individuals in the United States earn over 12 times more than those in the lowest-earning 10%, based on the latest Census data,” WalletHub analyst Cassandra Happe said in a news release. “By measuring the income of various percentiles against a state’s median income, we can better identify where income disparities are more prevalent, which could help us better understand why residents of certain states struggle more to make ends meet.”
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Which States Produce the Highest (and Lowest) Incomes?
To determine the states where people have the best and worst incomes, WalletHub compared the 50 states and D.C. based on three key metrics measuring earnings for different segments of the population, adjusted for the cost-of-living index (COLI). Here’s a look at those metrics, along with their weights.
Average annual income of top 5% (adjusted for COLI): double weight (~50.00 points).
Median annual household income (adjusted for COLI): full weight (~25.00 points).
Average annual income of bottom 20% (adjusted for COLI): full weight (~25.00 points).
In terms of income levels by state, these are the 10 states where residents have the highest income levels:
Overall Rank | State | Total Score | Average Annual Income of Top 5% (Adjusted for COLI) | Median Annual Income (Adjusted for COLI) | Average Annual Income of Bottom 20% (Adjusted for COLI) |
1 | Virginia | 69.59 | $518,296 | $89,393 | $18,694 |
2 | New Jersey | 68.85 | $505,621 | $117,847 | $16,445 |
3 | New York | 67.60 | $553,436 | $91,366 | $13,301 |
4 | Connecticut | 67.42 | $518,757 | $114,156 | $14,576 |
5 | Washington | 62.29 | $474,067 | $103,748 | $18,223 |
6 | Utah | 61.60 | $448,195 | $89,786 | $22,491 |
7 | Illinois | 59.64 | $504,800 | $78,304 | $16,192 |
8 | Minnesota | 59.48 | $464,981 | $86,364 | $19,797 |
9 | Colorado | 57.55 | $456,603 | $97,301 | $18,451 |
10 | Massachusetts | 57.39 | $466,208 | $127,760 | $13,689 |
These are the five states that rank at the bottom of the list, in descending order: Vermont, Maine, Mississippi, New Mexico and West Virginia.
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This article originally appeared on GOBankingRates.com: 10 States Where Residents Have the Highest Income Levels in the Country