Prior to the COVID-19 pandemic, American households were earning more than they ever had before. The median household income in 2019 was $65,712, up from $62,860 the previous year — a 4.5% increase. Though nearly every state reported an increase in its median household income, the percentage increases in some states were nearly double the U.S. increase.
24/7 Wall St. reviewed data on each state’s change in median household income from 2018 to 2019 to determine the states where incomes have increased the most. Income data, as well as data on the poverty rate, came from the U.S. Census Bureau’s 2019 American Community Survey. Data annual unemployment rates came from the Bureau of Labor Statistics. In 10 states, the changes recorded were not considered statistically significant, and those states were omitted from the list.
The states where incomes have increased the most were not clustered in one area, and both wealthier and poorer states had some of the largest increases. In a dozen states, incomes increased by more than 5% from 2018 to 2019. Five had higher incomes than the U.S. median of $65,712, while seven had lower incomes. The state where income rose the most has been until recently the poorest in the nation based on median household income
None of the 12 states with the largest increases in median household income is a Midwestern state, while five are Southern, five are Western, and two are located in the Northeast. Of the seven states in which incomes increased by less than 3%, four are in the South and three are in the Midwest.
The current U.S. economy is very different than it was in 2019 largely because of the turmoil caused by the COVID-19 pandemic. Millions of Americans lost their jobs and filed for unemployment benefits. Though the unemployment rate has started to decline, experts are concerned about a resurgence of the virus in the fall that could lead to unemployment to rise again.
The state where income rose the most is not only among the poorest states based on median income. It is one where poverty has been high for decades, and where jobs in its primary industries have disappeared.
West Virginia sits at the top of the list.
With a median household income of $44,870, West Virginia was the poorest state in the country in 2018. However, after reporting a highest-in-the-nation 8.9% increase in median household income, the typical household in West Virginia now earns $48,850 — considerably more than the typical household in Mississippi. The median household income of $45,792 in Mississippi now ranks as the lowest in the nation.
West Virginia also reported one of the steepest declines in poverty of any state. The share of residents living below the poverty line fell from 17.8% in 2018 to 16.0% in 2019, a 1.8 percentage point drop. Unemployment fell to 4.9% from 5.2%.