Many items that Americans buy regularly have become more expensive recently. The consumer price index issued by the U.S. Department of Labor rose 7% in December, growing at the fastest pace since 1982. The figure is expected to stay high through at least the rest of this year, driven largely by supply change slowdowns. Among the items Americans have paid for the most recently are cars and gasoline, the prices of which have risen as much as 40%. And considering the cost of transportation and four other key factors, the state with the highest cost of living is Hawaii. (These are the states with the highest and lowest gas prices.)
Inflation is not the only challenge some Americans face as they try to earn enough money for key items like food, fuel, housing, and health care. A total of 11.4% of the people in the United States live in poverty. In many places, these people have trouble affording their most basic needs.
The U.S. median household income was $67,521 in 2020, according to the Census Bureau. This figure varies considerably by state. The median household income in Mississippi was $45,792. Topping the list, the figure in Maryland was $86,738. (Another significant variable is what it costs to retire comfortably in every state.)
The cost of living – the amount necessary to cover essential expenses – in each state comes close to matching each one’s median household income. That makes sense. Expensive goods and services would not sell well in Mississippi.
To find the state with the highest cost of living, 24/7 Wall St. reviewed the Composite Cost of Living Index for the third quarter of 2021, the most recent available, published by the Missouri Economic Research and Information Center.
The MERIC study uses an index based on the relative costs of groceries, housing, utilities, transportation, and health care to rank states. The state with the highest cost of living index was Hawaii at 193.3, driven up in part by the unusually high cost of housing. The index for the second-most expensive state, New York, was 148.2, a full 45.1 points lower.
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