In this article, we will look at the 25 states where everyday Americans earn the lowest incomes. We have also discussed the state of salaries in the US.

As of 2024, salaries for new roles in the US have not only been stagnant but, in some cases, have been even decreasing. Reports indicate that 48% of surveyed US companies have lowered pay for certain positions. It is concerning to note that the job market in the US has been fluctuating since the onset of the pandemic. Employers initially offered high salaries to attract talent as there was an increase in open roles. However, as economic uncertainties persisted and companies scaled back hiring efforts, the demand for workers diminished. Sectors that once experienced high demand for workers, such as hospitality, retail, and technology, are now witnessing a reset in compensation expectations due to an oversupply of labor. To read more about industries and quit rates, see the Industries with the Highest Number of Quits in the US.

While salaries have been disappointing overall in the US, average salaries by profession can also vary in different states. Massachusetts has surprisingly become the state with the highest median annual salary of about $60,690, according to the Bureau of Labor Statistics salary data. The number has surpassed the expectations that one might have for New York City or Silicon Valley. However, these high wages often come hand in hand with a higher cost of living, with Hawaii being the only state, apart from the District of Columbia, where living costs are higher than those of Massachusetts. In fact, Hawaii is also considered one of the states that make the most money for the US. On the other hand, Mississippi is one of the states with the lowest average salaries in the US. to read more about average salaries by state, see Average Salary in Each State in US.

There is no question about why salaries are one of the biggest sources for motivation for employees at work as salaries are crucial for maintaining a decent quality of life, especially considering the varying costs of living across different cities in the US. In major US cities like New York, San Jose, and Boston, the cost of living is significantly higher which makes it crucial to earn enough to cover basic expenses comfortably. For instance, in New York City, a single individual needs approximately $138,570 annually to live comfortably, while a family with two adults and two children requires around $318,406. Similarly, San Jose requires $136,739 for an individual and $334,547 for a family in similar circumstances.

Despite these concerning numbers that make high salaries look like the ultimate determinant for an average American employee, in a recent survey, 77% of respondents across 16 countries, including the United States, confirmed their personal preference for the importance of a balanced life over career growth. This trend is particularly pronounced among younger generations as 60% of millennials and 56% of Gen Z adults are willing to trade a 20% pay cut for a better work-life balance. Conversely, older demographics show less inclination, with only 45% of Gen Xers and 33% of Baby Boomers willing to make such a sacrifice.

Nevertheless, Walmart Inc (NYSE:WMT) has recently announced a major boost in annual salaries for its US store managers, effective February 1st. The decision sees the average salary and bonus for these managers rise to $128,000 annually, up from $117,000 previously. Additionally, the revamped bonus structure will offer the potential for bonuses of up to 200% of base salary, contingent on store performance and achieved targets. Moreover, Walmart Inc (NYSE:WMT) also did not let its frontline hourly associates down as they raised their average hourly pay to over $18, up from $17.50 announced in the prior year.

This increment goes hand in hand with Walmart Inc (NYSE:WMT)’s ongoing efforts to retain employees and enhance its competitive edge in the tight labor market. With approximately 1.6 million associates in the United States, Walmart Inc (NYSE:WMT)’s investment in its workforce confirm that they have a proactive approach to sustaining growth and ensuring employee satisfaction.

On the other hand, Microsoft Corp (NASDAQ:MSFT)’s CEO Satya Nadella has announced plans to resume performance-based raises for certain employees after a year of stagnant salaries. This decision is following internal discontentment over compensation and aims to address employee concerns. Despite Microsoft Corp (NASDAQ:MSFT)’s $3 trillion valuation, employee satisfaction has been an ongoing issue that has prompted actions like the 2022 across-the-board compensation raise and, more recently, an increase in stock awards to retain talent.

Moreover, Microsoft Corp (NASDAQ:MSFT)’s recent $3.3 billion investment in Wisconsin will involve the expansion of cloud computing and AI infrastructure and is expected to create approximately 2,300 union construction jobs by 2025. Moreover, the establishment of a Data Center Academy in collaboration with Gateway Technical College will train over 1,000 students to meet the demands of the burgeoning IT sector which will further enhance job prospects in the area.

Our Methodology

To list the states where everyday Americans earn the lowest incomes, we held annual median salary by state as the primary metric. We did so because median income offers a more accurate representation than mean income, as it isn’t skewed by extreme outliers. By focusing on everyday Americans, we prioritize the typical worker’s experience to guage the income level that most individuals in a state earn. We obtained data from the US Bureau of Labor Statistics, and the list has been presented below in descending order.

By the way, Insider Monkey is an investing website that uses a consensus approach to identify the best stock picks of more than 900 hedge funds investing in US stocks. The website tracks the movement of corporate insiders and hedge funds. Our top 10 consensus stock picks of hedge funds outperformed the S&P 500 stock index by more than 140 percentage points over the last 10 years (see the details here). So, if you are looking for the best stock picks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

25. Ohio

Annual Median Salary: $44,750

In 2024, Ohio’s employment landscape is facing challenges with a projected slowdown in job growth with an anticipated “mild” recession. Despite a low unemployment rate of 3.6%, the region struggles with a shortage of skilled workers, compounded by a net migration loss.

To read more about unemployment rates in the US, see the States with the Highest Unemployment Rates.

24. Utah

Annual Median Salary: $44,470

Utah is one of the states with the lowest annual incomes. In addition, data reveals that Utah ranks third lowest in income inequality among states, while Salt Lake City and West Jordan City claim the lowest positions among metropolitan areas and cities respectively. Despite these achievements, approximately 360,000 Utahns still struggle with poverty.

Interestingly, Utah is also one of the richest states in America.

23. Iowa

Annual Median Salary: $44,350

In Iowa, a quarter of the population is facing asset poverty and a high college graduate debt that averages about $28,466. While the extreme poverty rate stands at 5%, nearly one in ten individuals experience food insecurity. Despite a 2.6% unemployment rate, nearly a fifth of jobs are low-wage.

22. Nebraska

Annual Median Salary: $44,100

Despite approximately 60,000 children living in poverty as of 2023, the state holds over $125 million in unspent federal funds designated for helping its neediest families. Over the past decade, the state’s Temporary Assistance for Needy Families reserve has more than doubled, while cash payments to low-income households have decreased due to stringent eligibility criteria.

21. Texas

Annual Median Salary: $43,460

In Texas, the statewide poverty rate observed a slight decrease over a five-year span ending in 2022, dropping from 16% to 13.9%. However, 76 out of 254 counties, mostly rural, saw increases in poverty rates.

20. Georgia

Annual Median Salary: $42,890

Over 722,000 households are set to lose access to the Affordable Connectivity Program, which provided $30 monthly for internet access and a one-time $100 allowance for devices in Georgia. Despite enrolling 10 million households nationwide within two months of its launch, the program is approaching its closure due to funding depletion.

19. Missouri

Annual Median Salary: $42,310

Missouri is one of the 20 states with the lowest incomes in the US. Owing to the challenges of low-income families and children, the Missouri House of Representatives has recently approved a bill to extend preschool access to low-income children aged 3 to 5.

18. Montana

Annual Median Salary: $42,210

In Montana, poorer families are paying more taxes compared to richer ones. Families earning less than $22,500 pay 9.5% of their income in taxes, while the richest 1% pay only 6.7%. Recent laws have made this gap worse by giving tax breaks to the wealthy. As a result, lower-income families are feeling the squeeze.

17. Indiana

Annual Median Salary: $42,100

The recent approval of a $30 million grant by the Indiana State Budget Committee has been a pivotal moment for northeast Indiana. Aimed at stimulating population growth, increasing wages, and boosting credential attainment across the region’s 11 counties, the funding will address the socioeconomic challenges.

16. Kansas

Annual Median Salary: $41,870

In Kansas, Governor Laura Kelly has proposed a minimum wage hike exclusively for state workers to increase 969 executive branch employees to $15 hourly pay and grant all state workers an extra 5% raise. However, this raise doesn’t extend beyond state employees. The minimum wage for non-state workers will remain stagnant at $7.25 per hour, unchanged for 15 years.

15. North Carolina

Annual Median Salary: $41,810

In 2022, the median wage for direct care workers in North Carolina was $13.62 per hour. Now, a recent federal rule mandates that home health care providers allocate at least 80% of Medicaid payments toward their workers’ wages. This policy shift aims to address the chronic shortage of direct care workers nationally, which North Carolina also struggles with.

14. Florida

Annual Median Salary: $40,820

In Florida, the issue of low wages hits hard, especially in the education sector. According to the National Education Association’s 2024 report, the average teacher salary in Florida is $53,098, placing it nearly at the bottom of the list among US states. It is one of the lowest paying states for teachers.

13. Nevada

Annual Median Salary: $40,810

In Nevada, the tax burden disproportionately affects low-income residents, as the bottom 20% of earners pay a 11.9% of their income in taxes, compared to just 2.8% for the top 1%. This tax disparity is ranked as the 5th highest in the country.

12. Kentucky

Annual Median Salary: $40,180

In Kentucky, particularly in regions like Western Kentucky and Eastern Kentucky, low-income communities have been facing major economic challenges exacerbated by recent natural disasters like tornadoes and floods. With a recent $62.5 million investment by the Environmental Protection Agency in solar energy, there’s hope for relief.

11. Idaho

Annual Median Salary: $40,060

Small-business workers face challenges with low wages in Idaho, making it one of the worst states for small businesses. Ranking third from the bottom in salaries for businesses with 10-19 employees, Idaho pays its workers well below the national average. The average annual wage for employees in this category in Idaho is $38,200 which is nearly 19% below the national average of approximately $46,800.

10. Tennessee

Annual Median Salary: $39,930

The wage issue in Tennessee remains contentious as the proposal to increase the minimum wage to $20 per hour failed in both House and Senate committees. The minimum wage in the state is currently set at $7.25 per hour.

9. New Mexico

Annual Median Salary: $39,900

Apart from issues of low-income, New Mexico also observes significant mental health challenges. 19% of teenagers in the state report experiencing depressive episodes within a year. Factors such as poverty and childhood trauma contribute to these statistics, according to UNM psychiatrist Dr. Kristina Sowar.

8. South Dakota

Annual Median Salary: $39,870

In South Dakota, Republican lawmakers aim to ban guaranteed basic income programs due to concerns about government dependency. Despite successful pilot programs nationwide, including in Boston and Minneapolis, the bill passed on a party-line vote which restricted future local initiatives. Critics argue such programs undermine work ethic and burden taxpayers.

7. Oklahoma

Annual Median Salary: $39,100

In Oklahoma, the estimated living wage for a single worker is $46,024 which is significantly below the national median income of $57,200. This means many individuals struggle to meet basic expenses.

6. Louisiana

Annual Median Salary: $38,970

In Louisiana, the battle for fair wages and income equality continues to exist even in 2024. With one in five Louisianians living in poverty, the recent rejection of bills to raise the state’s minimum wage has exacerbated the struggle. State senators voted against measures proposed by Democratic Senator Gary Carter, which sought to establish a state minimum wage starting at $10 per hour and gradually increasing to $14 per hour, while also advocating for equal pay for women.

Louisiana is one of the states with the highest resignation rates in the US.

5. South Carolina

Annual Median Salary: $38,870

In South Carolina counties, poverty rates spanned from 8.3% to 36.7% in 2022, with a median of 14.0% which was a 0.5% decrease from 2021. The state has the 5th lowest median income in the country.

4. Alabama

Annual Median Salary: $38,470

In Alabama, income issues persist despite a home price-to-income ratio of 3.7 which is below the national average of 4.7. The median home price is $221,490, while median household income is $59,674. Over the past five years, median home prices have increased by 46.1% which has worsened the burden on mortgage holders as 22.8% spend over 30% of their income on housing.

Alabama is also one of the worst states for workers in the US.

3. West Virginia

Annual Median Salary: $37,770

In West Virginia, the minimum wage has remained stagnant for ages. Delegate Larry Rowe proposed a bill with an aim to raise the state’s minimum wage to $15 by 2028, with an interim increase to $10 this year. However, this bill is still pending in the House Workforce Development Committee.

2. Arkansas

Annual Median Salary: $37,270

Unemployment claims in Arkansas have been observed to decline last week, according to data from the US Department of Labor. Initial filings dropped to 997, down from 1,295 the previous week. These numbers indicate a decrease in layoffs in Arkansas.

1. Mississippi

Annual Median Salary: $36,100

Despite being one of the poorest states in the US, Mississippi’s Medicaid expansion efforts have been stalled due to political discord which leaves behind approximately 74,000 low-income workers without healthcare coverage. With an annual median salary of $36,100, Mississippi is the state where everyday Americans earn the lowest incomes.

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Disclosure: None. 25 States where Everyday Americans Earn the Lowest Incomes is originally published on Insider Monkey.