How Do You Stack Up to the Average Income in Your State?
How Do You Stack Up to the Average Income in Your State? ·GOBankingRates
John Csiszar
Updated 6 min read
Understanding what the average income is in your state can help you determine if you’re ahead of the curve or behind it when it comes to your own salary. If you’re working long hours in a hard job yet still earning well below the median income, perhaps it’s time to ask for a raise or begin looking for a new occupation. Similarly, if your income is far above average, you can rest assured that your industry is not lacking for opportunity.
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Averages are typically measured in two ways: mean and median. Mean or “average” income takes the total amount of earnings across a sample and divides it by the number of participants. Median income, on the other hand, is the midway point of a sample, with half the people sampled earning above the median and half earning less.
The difference can be significant. High earners can skew the average income much higher than the median income. To use a simple example, if two earners make $20,000, one makes $40,000 and two make $120,000, the median income is $40,000. However, the average is $64,000. Thus, depending on how you measure “average” income, the figures can be highly variable. This differential can be seen in terms of the U.S. as a whole, where the average family household income is $84,938 but the median is just $60,293.
Regional differences can also play a huge role in average income. States with higher costs typically also have higher average wages. However, some states have higher wages overall regardless of typical expenses. For example, California is regarded as a high-cost state, and average salaries unexpectedly top $101,000. However, Minnesota is not generally considered an expensive place to live, yet average salaries top $90,000 in the state, far above the national average income of $84,938.
To help get the black-and-white figures for worker income in every U.S. state, GOBankingRates conducted a study using five-year estimates from the U.S. Census Bureau’s 2018 American Community Survey. Both mean and median state income figures were tallied. Results are presented in alphabetical order, from Alabama to Wyoming. These figures were sampled long before the COVID-19 pandemic swept the country and drove unemployment rates into the double digits. As such, these averages are likely to change when sampled for 2020.
Methodology: In order to determine each state’s average income (i.e., mean income), GOBankingRates used the five-year estimates from the 2018 American Community Survey conducted by the U.S. Census Bureau. The same information was used to find each state’s median household income. All data was collected on and is up to date as of May 29, 2020.
