US States With the Highest Median Annual Household Income

The median US income in 2015 was $56,516 according to the United States Census Bureau in collaboration with the Bureau of Labour Statistics. This median household income represented a 5.2% increase from the previous year’s median income of $53,713. Although there was an increase, inequality was still present among the family income of various states due to the 2008 economic recession. According to the Henry J. Kaiser Family Foundation, in 2015, the state that had the highest median household income was New Hampshire with an income of $75,675 whereas Mississippi had the lowest household income at $40,037.

According to research conducted by the Kaiser Family Foundation, the total compensation of employee wages and the contribution to employee health care costs went up in 2013. However, an analysis of total compensation from salaries and wages shows there has been a decline since 1970. This decline is due to the shift from people obtaining income from labor to now deriving their incomes through capital income such as property and business ownership.

Top 3 States

1. New Hampshire - $75,675

According to 2015 US Census data, New Hampshire was among the states with the highest median income in the country. One of the causes of such a high income is because New Hampshire has less income inequality and lower poverty rates than other states. Despite not having many renowned millionaires, the state has many middle-income individuals not many low-income individuals. Another reason for the high income could be because a lot of entrepreneurs, high profile professionals, and individuals with college education live in New Hampshire even if the work elsewhere. New Hampshire’s rate of health insurance for private sector employees is also the second highest in the country after Massachusetts.

2. Alaska - $75,112

Alaska is ranked among the states with the highest median income. As per the data provided by the Keiser Family Foundation in 2015, Alaska had a median household income of $75,112. Despite the high living standards, Alaska is also among the states with the lowest poverty levels. The high income in this state is majorly from the high paying oil jobs in the oil industry.

3. Maryland - $73,594

Maryland is thought to have the second lowest poverty rate in the country and among the highest regarding cost of living. With this trend, Maryland is among the states with the most equitable income distribution in the US. Maryland has the highest percentage of millionaires who have over $1 million of investable assets. With a median income of $73,594, Maryland was ranked the third highest in 2015, census.

Besides the above three states that were among the states with the highest median household, other states include Connecticut with $72,884 and the District of Columbia with $70,071 completing the top five. All of these highly ranked states have low poverty levels and are home to millionaires who have big asset bases. They are also home to numerous entrepreneurs and professionals.

Conclusion

The rate of educational attainment is directly associated with regional income which makes it not surprising that the wealthier states have higher education rates. Globalization and the general shift from labor income to capital income has a significant influence on the median household income. Educational levels should be improved in the poorer states to help improve income inequality.