Personal finance is a necessary subject of discussion. Some do not like it and find it makes for uncomfortable conversation, but like it or not, finance and economics are critical to our daily lives. Statistical sources like to bombard the public with rankings for everything from credit card usage to net worth to savings rates and beyond. Among the most basic of these ratings is income, and the US Census Bureau has published a ranking of the 50 U.S. states showing the median household income by state for 2013. The US Census Bureau does this every year and the data reflects the wide disparity of income from one state jurisdiction to the rest. Here are the 50 U.S. states and District of Columbia ranked by median household income from highest to lowest:
|District of Columbia||65,246|
The above data on its face doesn’t present too many surprises. States like Mississippi, Arkansas, and Louisiana have hovered near the bottom of the household income rankings for quite some time and show little sign of relinquishing their bottom position. Likewise, states like Maryland, New Hampshire, and New Jersey and other top- ranking states are likely to remain near the top for the foreseeable future.
But there are some rankings on the list above that are bound to raise some eyebrows. One glaring example is New York. The Empire state, a place known for Wall Street, the Hamptons, and other things associated with wealth, ranks only 35 in overall household income. There is no doubt that New York has its share of rich residents, so why the bottom- half ranking? What it shows is that New York has a wider than average gap between its wealthiest and poorest households. The mega millionaires that call New York home are not frequent enough in number to affect a statistical measure such as median, which is simply the number in the center when all pieces of data are arranged from highest to lowest. New York’s $47,680 median household income therefore indicates that half of the state’s households earn less than $47,680 per year and half earn more.
States hit harder than others by the Great Recession have also been pushed lower on the list than historic averages would have you believe. The best example is Ohio, which now ranks 41st in household income. Go back to pre- recession 2007 and Ohio ranked in the top half, in 24th place. Ohio and other recession- ravaged states have faced difficulties attracting new employers and the road to recovery has been tough. But these states and others could very well retake their position in the household income rankings over the next few years.
Financial statistics are useful measures of economic activity and household income is among the most basic of all. The rankings above are a good indicator of which states are doing well and which are not, at least in terms of income. There are other factors, of course, like cost of living and other quality of life measures. But income rankings by state are useful tools to assess economic vitality and serve as a good benchmark to compare your own household’s economic progress with that of other residents.
Copyright 2014, Bryan Carey