The 10 states where people earn the most money in the US
Workers in these states tend to earn the highest salaries, but how far do their dollars really go? We took a look at the 10 states with the highest paycheck
It can be challenging to determine which state provides the most comfortable economic living conditions due to several variables to consider, including cost of living and income. Income is a significant factor, and to compare the average income between states, we will examine the per capita value. To calculate per capita income, we add up all sources of income within the same region, including salaries, dividends, interest, rent, and benefits, and then divide it by the total population. The higher the per capita income, the greater the wealth of the region.
Keeping this in mind, we took a look at the top ten US states with the largest per capita incomes. These states are projected to earn the highest amount of money in 2023. However, just because these states have higher per capita incomes does not mean that there is less income inequality. This issue will be touched upon because solely focusing on the per capita value can often lead to misleading conclusions on how the average resident of these states lives.
Ten states with the highest per capita incomes
According to statistics from the US Bureau of Economic Analysis, the ten states in 2021 which the highest per capita real incomes were:
- Connecticut: $70,424
- Massachusetts: $68,104
- Wyoming: $66,108
- South Dakota: $62,032
- New Hampshire: $61,946
- North Dakota: $61,441
- New Jersey: 61,239
- New York: $60,870
- Colorado: $59,545
- California: $59, 449
Although these are the ten states with the highest income, the truth is that the District of Columbia far exceeds the statistics with a per capita income of $75,216 dollars a year.
Why do we look at real income?
Looking at real income allows researchers to compare the purchasing power of households rather than the numerical value that is wholly decontextualized from the economic conditions of each state. The real incomes are also adjusted for inflation, unlike nominal figures. For example, nominal incomes in California are higher than those offered in most states. However, the high cost of living does not mean that this higher value equals greater purchasing power for the average resident.