Whether you’re looking to relocate to a state where you might have a better earning potential or just are curious to see where your current state might rank, this list should be interesting and maybe obvious for some. These are the 5 states with the highest average income and the 5 state with the lowest average income.
According to Forbes Advisor, which is the organization that created this list, the nationwide average annual salary in the US for 2023 is $59,428 and the average hourly rate is $28.34. So when we look at these individual states, we can compare to see how far above and how far below they rank on the income scale.
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Northeast and West Coast states have higher average salaries than the South and Midwest.
But the areas with higher income also tend to be more expensive to live in. So is it really worth it to move to a higher income area and face higher living costs? For some the answer is a definite yes and for others it’s a big no no.
One way to beat this dilemma is to live in a cheaper state while earning the salary of a more expensive state. That’s possible for those who are working fully remotely, as more and more people have been doing in recent years.
5. Alabama
The state that was the center of the civil rights movement has one of the lowest average salaries on the list with $50,620. With a population of about five million people, Alabama is also known for the agriculture industry and college football.
According to the Bureau of Economic Analysis, the average cost of living in Alabama in 2023 is around $39,657 per year for a typical single individual, so there is a bit of a cushion between average income and average expense of living.
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4. South Dakota
The home of Mt. Rushmore comes in at the number 4 spot with an average annual salary of $49,890. This sparsely populated midwestern state has a population of less than a million people, so there is a ton of room there if you’re looking for a quiet, and cheaper place, to relocate to. That’s because the cost of living in South Dakota is 6% lower than the national average with housing being 8% lower, utilities 10% lower, and groceries 7% lower.
Some of the biggest industries in South Dakota include agriculture, mining, and manufacturing.
3. West Virginia
Few states are as beautiful as West Virginia if you’re the outdoorsy type, but the average salary here is nothing to brag about at $49,170. But if you relocate there with a well paying remote or even local job, you can take great advantage of the low living costs.
A study by ConsumerAffairs found that West Virginia is the second cheapest state in the nation. If housing is your biggest concern, the study found that West Virginia has the lowest median prices for home buying and renting. So someone making that average salary in West Virginia might be living as well as someone else making a higher salary in a more expensive state.
2. Arkansas
Arkansas comes in as the runner up state for the lowest average annual salary with $48,570. The Natural State is full of natural beauty and is the only state to produce diamonds. According to MIT’s living wage calculator, a single adult would need to make $31,719 to cover living costs in Arkansas. That means someone making the average salary of about $48,000 can live very comfortably.
According to Zillow, the average home value in this state is just above $200,000, making homeownership super affordable.
1. Mississippi
Mississippi comes out the champion of this list as the state with the lowest average income of $45,180. The state known for blues, magnolias, and the Mississippi river is home to almost 3 million residents. According to redfin, some of the pros of living in Mississippi include history, affordable higher education and housing, beautiful nature, and the music scene. Some of the cons of living here include scorching heat and humidity in the summer, thunderstorms and flooding, and those pesky bugs.
These are the 5 states with the highest average income
5. New Jersey
The number 5 state with the highest average salary is the state known for Atlantic city, Jersey shore, and Ellis Island. New Jersey boasts a nice average salary of $70,890 and the major industries in the state include pharmaceuticals, financial services, advanced manufacturing, and information technology.
As it is for ares with higher income, New Jersey’s cost of living is 13% higher than the national average. If you’re looking to buy a home, you will be faced with home prices that are 31% higher than the national average.
4. Washington
The state of Washington, known for being home to giant tech companies, has an average annual salary of $72,350. Income is higher here than New Jersey but so is the cost of living, which is 16% higher than the national average. If you’ve been complaining about grocery prices going up where you live, then don’t even think about moving to Washington. Here, grocery prices are 14% higher than in the rest of the country.
The only good news about Washington when it comes to expenses is utilities, which come in 8% lower than the national average. So take advantage of the utilities but maybe eat once a day.
3. California
I know most of you guessed the golden state would have the highest average income but it actually comes in at the number 3 spot with an average annual salary of $73,220. The state with nearly 40 million people, which honestly should be considered its own country, has diverse industries from tech to entertainment to agriculture to tourism.
The good thing about California is that it’s so diverse that you can find relatively affordable areas to live in if you don’t insist on staying in the super expensive Southern California or Bay Areas. The bad news is that if you do want to live in the popular areas, get ready to pay dearly for it. If you want to live comfortably in those areas, one study found a single person needs to earn above $76,000.
2. New York
The state of New York takes the runner up spot with an average annual income of $74,220. The state known for being the financial center of the U.S. has a population of almost 20 million. That attractive average salary becomes more or less attractive depending on where you’re located in New York state. For example, Albany is 22.8% less expensive than New York City.
The cost of living in overall New York state is 20.5% above the national average, but if you dream of relocating to world famous Manhattan, life there will cost you 142.5% above the U.S. average. Get this, the cost of housing in Manhattan is 406.9% higher than the U.S. average.
Yeah, if you can make it here, you can make it anywhere.
1. Massachusetts
Massachusetts boasts the highest average salary of $76,600.
The most populous state in the region of New England is home to elite higher education institutions and the nation’s first library. The cost of living here is 50% higher than the national average. Housing is 111% higher than the national average while groceries are 30% higher.
