Over the last 50 years, household incomes have risen in almost every U.S. state, yet this growth has been inconsistent. A recent Urban Institute analysis of U.S. Census Bureau data highlights significant disparities. States in the West, mid-Atlantic, and New England experienced the largest income increases, while the Midwest lagged behind.
From 1970 to 2023, Utah led with a 78% rise in median household income, increasing by $40,820 to $93,421 when adjusted for inflation. Following Utah, Colorado, New Hampshire, California, Arizona, and Virginia each saw over 60% growth in adjusted median incomes. On average, U.S. median household incomes grew by 32% during the same period.
West Virginia was the only state where inflation-adjusted incomes declined, with a 0.4% drop to $55,948. In the study, West Virginia ranked just above Mississippi, which had a median income of $54,203. Massachusetts topped the list with $99,858.
The study from the Urban Institute, a left-leaning think tank, revealed no link between state sales and income tax rates and income changes. Surprisingly, states with higher property taxes and colder climates saw more income growth, challenging the belief that low taxes and warm weather boost prosperity.
Educational attainment and increased immigration were the key factors associated with income growth. “This could be because immigration leads to economic growth, immigrants seek out growing areas, or both,” the study noted.
