Median household income in the United States declined for the second straight year in 2011, the Census Bureau reports -- falling more than 8% below its 2007 pre-recession peak.
While the trend is generally down, some states are faring far better than the average -- and, of course, some are faring far worse.
Interestingly, while most of the states with at the low end of the median income spectrum are suffering from weak economies, unemployment in and of itself was not a key factor. Only two states of the lowest 10 were also among the worst 10 for unemployment in 2011, and five of the worst-off states had unemployment rates lower than the national rate.
According to Brookings Institution fellow Elizabeth Kneebone, that disconnect isn't a surprise. "Earnings for middle and lower-wage workers have fallen or stagnated over time," Kneebone explained. "So you can have a situation where jobs are being created ... but the types of jobs matter. If those are jobs that pay low wages, even if you're working full time, that might not be enough to lift you above the poverty line."
These are America's richest states and poorest states.
Massachusetts' median income is well off its 2008 high of $68,055. But nearly 10% of families in the state made more than $200,000 in 2011, the fourth-highest rate in the country. Massachusetts also had the lowest percentage of the population without health insurance in 2011, at a mere 4.3% - a whopping 10.8 percentage points below the national rate, largely due to the near-universal health care law signed in 2006 by then-Gov. Mitt Romney.
Connecticut is one of only three states, along with Maryland and New Jersey, to have had more families earning over $200,000 a year (11.2%) than living below the poverty line. The western region of the state is home to a sizable population of hedge funds, and their employees, along with residents who work in New York's financial district, help drive up the state's median income. Second only to New York, Connecticut had one of the largest gaps between the rich and the poor. At nearly 11%, the proportion of families living below the poverty line in Connecticut is the fifth lowest in the country.
In New Jersey, 10.9% of families earned more than $200,000 last year and just 10.4% of residents lived below the poverty line, fewer than any state except for New Hampshire. Still, there were areas in the state where poverty was profound: Newark, where 31.6% of residents lived below the poverty line, and Paterson's where 28.9% did.
In 2011, Alaska moved ahead of New Jersey to take the No. 2 spot on this list. The state benefits from its vast natural resources, particularly oil, natural gas, and timber. Since 1957, the state has collected nearly $100 billion in taxes from oil and gas companies, and Alaska has accounted for more than 13% of total U.S. oil production. Residents reap the benefits. Income inequality in the state is the second-lowest in the country. Just 3% of Alaskan families earned less than $10,000 per year, compared to the 5.1% nationwide. However, despite the state's high median income, just 5% of families earned more than $200,000 per year.
Maryland, which has had the highest median income of all states since 2006, was the only state in the country to have a median income above $70,000 in 2011. The state's 10.1% poverty rate was well below the national rate of 15.9%. Furthermore, a sizable portion of the population is earning well above the median income. Maryland is one of three states, along with New Jersey and Connecticut, where more than 10% of families earned more than $200,000 in 2011. Across the U.S., only 5.6% of families made more than $200,000 in 2011.
In 2011, Alabama's median income was more than $9,000 below the nation's median income, while 6.4% of families lived on less than $10,000 a year -- worse than in all but five states. For the second year in a row, Alabama's poverty rate was 19%, remaining more than three percentage points above the national rate. According to Gallup, since August 2011, almost 23% of state residents reported not having enough money to buy food at least once. However, despite its high poverty rates, only 14.3% of Alabamians did not have health insurance last year -- slightly better than the national average of 15.1%. The state's inexpensive health care --the least expensive in the country for the fourth quarter of 2011 -- is likely due some credit for that.
Kentucky's unemployment rate of 9.5% is well above the national average of 8.9%, and is likely stay high in the near future, as mining, a major industry in Kentucky, has declined in the past year due to a drop in natural gas prices. Severe poverty plagues the state: 6.9% of families earned less than $10,000 in 2011, the fourth worst rate in the country. Meanwhile, a mere 3% of Kentucky families earned more than $200,000 a year, the seventh-lowest rate in the country. However, Kentucky does have the fourth-lowest cost of living in the U.S.
Despite a lower than average unemployment rate of 8% in 2011, 19.5% of Arkansas families lived below the poverty line. Poverty was slightly less of a problem in Little Rock, the state's capital and largest city, which had a 16.4% poverty rate and a median income of $40,976. Despite having the third-lowest cost of health care nationwide at the end of 2011, 17.1% of residents lived without health insurance last year -- well above the national figure of 15.1%.
West Virginia's median income of $38,482 was well off the median income of $40,093 in 2007. And while the state's unemployment rate of 8% was well below the 8.9% national average, like Kentucky, West Virginia's economy is already suffering from the weakening of the mining sector, which could fall further. The proportion of West Virginia residents without health insurance grew 4.9% in 2011, the third-largest increase in the U.S. One small silver lining for cash-strapped residents: Although the state's overall cost of living is about average, the cost of groceries is the third-lowest in the country.
Median household income: $36,919 Population: 2,978,512 (20th lowest) Unemployment rate: 10.7% (4th highest) Percentage below poverty line: 22.6% (the highest)
The median income of the poorest state in the country, Mississippi, was just over half that of Maryland, the richest, and has fallen every year since it peaked in 2007, dropping $2,677 during that time. Not only did Mississippi have the highest poverty rate in the country, but 7.8% of Mississippi families made less than $10,000 in 2011, which was also the worst rate in the country. While unemployment declined in most states between 2010 and 2011, Mississippi's actually rose 0.2 percentage points, one of only two states to see an increase.
To identify the states with the highest and lowest median household income, 24/7 Wall St. reviewed state data on income, poverty, and health insurance from the U.S. Census Bureau's 2011 American Community Survey (ACS). Based on Census treatment, median household income for all years is adjusted for inflation. We also reviewed unemployment data provided by the Bureau of Labor Statistics and additional 2011 ACS data on individual cities. Because the cost of living has a direct bearing income, 24/7 Wall St. considered cost of living data for Q4 2011 from the Council for Community and Economic Research.
--- By Michael B. Sauter, Samuel Weigley, Brian Zajac and Alexander E. M. Hess