Average American Income by State:
2024 Rankings, Data, and What It Means for Your Business
The average American income by state ranges from roughly $52,000 in Mississippi to over $104,000 in Massachusetts, with the U.S. median household income sitting at $80,610 in 2023 according to the U.S. Census Bureau. Using American Community Survey (ACS) data, the highest-earning states include Massachusetts, New Jersey, Maryland, New Hampshire, and California, while Mississippi, West Virginia, Louisiana, Arkansas, and New Mexico consistently rank at the bottom. But the number on the ranking chart tells only part of the story—cost of living, taxes, and housing burdens dramatically shift what that income actually buys.
Over my 20+ years leading Complete Controller, I’ve had the privilege of guiding thousands of small and midsize businesses through payroll benchmarking, expansion planning, and financial forecasting across every state in the country. What I’ve learned is that a high state income ranking rarely translates into automatic prosperity for the households or businesses inside it. In this article, I’ll walk you through the real numbers, show you how to read them without getting fooled, and give you a practical framework for turning state income data into smarter hiring, pricing, and cash-flow decisions.
What is the average American income by state?
- The average American income by state depends on the measure: median household income, average wage, or per capita income each tell a different story.
- Highest-income states: Massachusetts ($104,371), New Jersey, Maryland, New Hampshire, and California lead the nation.
- Lowest-income states: Mississippi ($52,719), West Virginia, Louisiana, Arkansas, and New Mexico consistently rank lowest.
- National benchmark: U.S. median household income was $80,610 in 2023 per the Census Bureau.
- Income ≠ purchasing power: Housing, taxes, and cost of living can erase a paycheck advantage fast.
How Income Is Measured Across the United States
Before we rank anything, you need to know what you’re actually looking at. Different sources use different definitions, and mixing them creates confusing—and often misleading—comparisons.
Median household income vs. Per capita income
Median household income is the midpoint where half of households earn more and half earn less. It’s the go-to measure for comparing typical households because it isn’t skewed by billionaires. Per capita income, by contrast, divides total income by every person in the population, including retirees and children, so it’s better for broad economic comparisons than individual paycheck analysis.
The main data sources you should trust
| Measure | Best Use | Primary Source |
| Median household income | Typical household comparisons | U.S. Census Bureau (ACS) |
| Average annual wage | Payroll benchmarking | Bureau of Labor Statistics (BLS) |
| Historical trends | Multi-year analysis | Federal Reserve Economic Data (FRED) |
| Rural vs. urban income | Regional planning | Economic Research Service (ERS) |
For household income rankings, I recommend Census/ACS data. For hiring and wage decisions, use BLS. And for tracking change over time, FRED is your friend.
Average American Income by State: The Highest Rankings
The states at the top of the income rankings share a few common threads—concentrated tech, finance, healthcare, and government sectors, plus higher educational attainment and dense metropolitan labor markets.
Top 10 states by median household income (2023 ACS)
| Rank | State | Median Household Income |
| 1 | Massachusetts | $104,371 |
| 2 | New Jersey | ~$101,000 |
| 3 | Maryland | ~$98,000 |
| 4 | New Hampshire | ~$96,800 |
| 5 | California | ~$95,500 |
| 6 | Washington | ~$94,600 |
| 7 | Colorado | ~$92,900 |
| 8 | Connecticut | ~$91,700 |
| 9 | Virginia | ~$89,900 |
| 10 | Utah | ~$89,100 |
What high-income states share
- Strong concentrations of technology, finance, healthcare, and professional services
- Above-average educational attainment
- Large metropolitan labor markets
- Higher housing and operating costs that eat into paychecks
- Wider gaps between metro and rural earnings
Average American Income by State: The Lowest Rankings
The lowest-income states tend to lean on manufacturing, agriculture, energy, and tourism—industries that often pay less than knowledge-economy jobs. But lower nominal income doesn’t mean lower quality of life once cost of living enters the picture.
Bottom 10 states by median household income (2023 ACS)
| Rank | State | Median Household Income |
| 1 | Mississippi | $52,719 |
| 2 | West Virginia | ~$55,900 |
| 3 | Louisiana | ~$58,200 |
| 4 | Arkansas | ~$58,700 |
| 5 | New Mexico | ~$59,700 |
| 6 | Kentucky | ~$61,100 |
| 7 | Alabama | ~$62,200 |
| 8 | Oklahoma | ~$63,600 |
| 9 | South Carolina | ~$67,800 |
| 10 | Tennessee | ~$68,800 |
Why low rankings don’t describe every resident
State rankings are averages, and averages hide a lot. A “low-income” state often contains prosperous metros like Nashville, Birmingham, or New Orleans with strong small-business communities. And a high-ranked state can contain households drowning in housing costs.
How State Income Compares Nationally—and What It Means for Cost of Living
Nominal income only matters if you know what it buys. The Census Bureau reported the U.S. median gross rent was $1,348 in 2023, while the median home value hit $303,400—and both numbers vary wildly by state.
The housing burden problem
Here’s the piece most rankings ignore: a high-income place can still feel unaffordable. According to the Joint Center for Housing Studies at Harvard, a record 22.4 million renter households were “cost-burdened” in 2022, spending more than 30% of income on housing. That means the paycheck advantage in high-income states often evaporates at the closing table or lease signing.
Income inequality and household income distribution
Two states with similar medians can look wildly different once you look at household income distribution and the Gini index. When I evaluate a new market with clients, I look at:
- Top 20% vs. bottom 20% income gap
- State-level poverty rate
- Housing cost burden
- Metro vs. rural income differences
How Business Owners Can Use State Income Data for Better Decisions
This is where the rubber meets the road. State income data isn’t trivia—it’s a planning tool for payroll, pricing, and expansion.
Set smarter payroll and hiring budgets
Don’t use a statewide average as your salary offer. Combine BLS occupation-specific wages with local metro data, then layer in benefits and payroll taxes. A “California salary” for a Bakersfield hire looks very different from one in San Francisco.
Forecast revenue and build state-specific cash flow
Household income can inform pricing strategy, customer segmentation, and geographic expansion—but treat it as an indicator of potential purchasing power, not guaranteed demand. Build regional assumptions for rent, insurance, payroll, sales tax, and shipping into your forecasts.
In my experience working with growing businesses, state-level income statistics are most valuable when tested against your own books. A national benchmark identifies opportunity; your cash-flow reports, payroll trends, and customer-level margins determine whether that opportunity is actually profitable. That’s exactly the kind of analysis our team at Complete Controller delivers every day for business owners navigating growth.
How to Read an Income Ranking Without Getting Fooled
A quick checklist I share with clients before they make a big decision based on income data:
- Confirm the measure—average, median, household, or per capita?
- Check the data year and dollar basis (nominal vs. inflation-adjusted)
- Compare against the same-year national benchmark
- Review income inequality and poverty data alongside the median
- Adjust for cost of living
- Consider metro vs. rural differences within the state
- Use occupation-specific BLS data for hiring
- Consult a financial professional before major moves
Never mix mean and median figures, and never combine one-year ACS estimates with five-year estimates in the same comparison. It’s the fastest way to draw a wrong conclusion.
Conclusion: Turning State Income Rankings Into Better Decisions
State income rankings give you a starting point, not a finish line. The strongest analysis combines median household income, average wages, income distribution, poverty rate, cost of living, and your own company’s financial data.
After two decades helping business owners across every state in this country, I can tell you that the best decisions come from pairing national benchmarks with clean, current, company-specific books. Before you expand, hire, or reprice, look at your payroll costs, margins, cash-flow forecast, and tax obligations. Visit Complete Controller to learn how expert bookkeeping support can help turn broad economic data into confident business decisions.
Frequently Asked Questions About Average American Income by State
What is the average income in the United States?
The U.S. median household income was $80,610 in 2023 according to the Census Bureau. Wage-based measures from the BLS report separate averages for individual workers.
Which state has the highest average income?
Massachusetts ranked highest with a median household income of $104,371 in the 2023 ACS. On wage-based rankings, Washington, D.C. leads, but it’s a federal district, not a state.
Which state has the lowest average income?
Mississippi ranks lowest at $52,719, followed by West Virginia, Louisiana, Arkansas, and New Mexico.
What’s the difference between average income and median household income?
Average income sums all earnings and divides by the number of households, which can be pulled upward by very high earners. Median household income identifies the midpoint and better represents a typical household.
Is income higher in states with a higher cost of living?
Usually, yes—but not always enough to offset the expense. High-income states often have expensive housing that erases the paycheck advantage, which is why purchasing power matters more than nominal earnings.
Sources
- U.S. Census Bureau. (Sept. 10, 2024). “Median Household Income in the United States (Table HINC-01).” Census.gov. https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-households.html
- U.S. Census Bureau. (2024). “Household Income in States and Metropolitan Areas: 2023.” American Community Survey. https://www.census.gov/programs-surveys/acs
- U.S. Census Bureau. (2024). “2023 American Community Survey 1-Year Estimates (Table DP04).” https://data.census.gov/table/DP04?q=DP04&g=0100000US
- Bureau of Labor Statistics. “State Occupational Employment and Wage Estimates.” U.S. Department of Labor. https://www.bls.gov/oes/current/oessrcst.htm
- Federal Reserve Bank of St. Louis. “Federal Reserve Economic Data (FRED).” https://fred.stlouisfed.org
- Hermann, Alexander. (2024). “America’s Rental Housing 2024.” Joint Center for Housing Studies of Harvard University. https://www.jchs.harvard.edu/sites/default/files/reports/files/HarvardJCHSAmericasRentalHousing_2024.pdf
- Economic Research Service. U.S. Department of Agriculture. https://www.ers.usda.gov
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Brittany McMillen
Brittany McMillen