Recently, we posted an update on the median household income for the 50 states and DC based on the Current Population Survey, a joint undertaking of the Census Bureau and Bureau of Labor Statistics, which includes annual data from 1984 to 2022. Let's now look at the actual purchasing power of those median incomes. For this adjustment, we're using the "C2ER Cost of Living Index" produced by C2ER, the Council for Community and Economic Research.
The median US household income in 2022 was $74,580 (more here). The median incomes by state, rounded to the nearest $100, ranged from the $108.2K high in Maryland to the $48.6K low in Mississippi. Here is an alphabetically sorted table showing the median data for the 50 states and DC along with the purchasing power of those dollars based on the C2ER Cost of Living Index. We are using figures for the Cost of Living Index for 2020.
The alphabetical listing above makes it easy to find individual states, but for some additional insight, let's sort the table by the purchasing power column. A quick look at the table below shows the huge spread between $93.2K purchasing power in Utah and $49.5K purchasing power in Hawaii.
The next chart gives us a clearer sense of the relative differences between household incomes and the actual purchasing power of those incomes across the 50 states and DC. We've calculated the difference between the actual median and its purchasing power in the column labeled "Difference". Twenty-eight states have a median purchasing power greater than the actual dollars, with Mississippi's 17.7% benefit from a low cost of living topping the list. At the other extreme, the exorbitant cost of living in Hawaii cuts that state's median household income purchasing power by a sobering 45.6%, worse than New York and California, which came in at -25.7% and -27.3% respectively.
For an idea of the geographical distribution of purchasing power, here is a map that color-codes the states based on a quintile breakdown.
Here is the same map that color-codes the states based on median incomes quintile breakdown.
Of course, these estimates of purchasing power for the 50 states and DC aren't helpful in evaluating the cost of living for major metropolitan areas, which can differ dramatically from the state averages. Consider, for example, the cost of living in the District of Columbia, which is about 23% higher than neighboring Maryland and 48% higher than its southern neighbor, Virginia. A more extreme example is Manhattan in New York City compared to the rest of the region and state.
Read more updates by Jen Nash
