In this article, we will look at the 25 states with highest average salary in America. We have also discussed some statistics related to the US economy. If you want to skip our detailed analysis, head straight to the 10 States with Highest Average Salary in America.
Since around 1890, the United States has held the position of the world’s largest economy by nominal measures. With a gross domestic product (GDP) of $27 trillion, the US economy constitutes over 15% of the global gross world product at purchasing power parity (PPP). The average gross annual wage per full-time employee in the USA was $74,738 in 2021, or around $6,228 per month.
Moreover, the average salary in the US is $59,428 annually whereas the per capita income in the United States over the past 12 months, adjusted for inflation to 2022 dollars, was $41,261. In 2022, the real median household income in the USA experienced a 2.3% decline, dropping to $74,580 from the 2021 estimate of $76,330.
Walmart Inc (NYSE:WMT) is set to raise the average salary for its US store managers, effective February 1, 2024. The pay-increase will increase the average annual salary from $117,000 to $128,000. Additionally, Walmart Inc (NYSE:WMT) will offer a bonus of up to 200% of base pay to store managers.
Approximately 75% of Walmart Inc (NYSE:WMT)’s field management teams, like store managers, began their careers in hourly roles. The salary adjustments will impact managers across different pay ranges, with those at the lowest end seeing the largest increases, from $65,000 to $90,000, while those at the top end will remain at $170,000. The changes in pay align with Walmart Inc (NYSE:WMT) ongoing efforts to increase starting wages, bringing the US average hourly wage to over $18 soon. These adjustments could potentially enhance Walmart Inc (NYSE:WMT) recruitment and retention strategies in the competitive job market.
In 2023, the US economy exhibited unexpected strength by adding 216,000 jobs, surpassing economists’ forecast of 175,000. However, this positive momentum was tempered by downward revisions of 70,000 to job gains in October and November. Despite the stable performance, overall job growth in 2023 slowed, with 2.7 million jobs added at a monthly rate of 225,000, down from 4.8 million and 399,000 in 2022.
While certain industries, like government, health care, and social assistance, continue to drive job gains, others, including trucking and professional services, are lagging. Notably, wage-growth did accelerate, with average hourly pay rising to $34.27 and a yearly increase of 4.1%, slightly above the Fed’s target. However, the labor force participation rate declined to 62.5%, marking the biggest drop in nearly three years, potentially complicating the Fed’s task of managing inflation. As the job market is anticipated to cool further in 2024, the rise in wage growth and decrease in participation may influence the Federal Reserve to maintain higher interest rates for an extended period.
Speaking of wage growth, Starbucks Corp (NASDAQ:SBUX) has announced major benefits for its hourly employees in 2024, with a minimum 3% pay raise (4-5% based on tenure), scheduling improvements, and career mobility opportunities. These changes have come amid the company’s ongoing legal battles with Workers United and efforts to enhance the employee experience before potential unionization. The benefits rollout includes pay raises effective January 1, 2024, with additional perks such as the first-ever Starbucks Corp (NASDAQ:SBUX) Barista championships (Feb.-June 2024) and an announcement of a new Siren credit card. However, Starbucks Corp (NASDAQ:SBUX) Workers United have still expressed dissatisfaction, claiming the company is implementing these benefits in nonunion stores while denying them to unionizing or unionized locations, prompting the union to file an unfair labor charge.
Owing to the rising inflation, International Business Machines Corp (NYSE:IBM) is set to increase its cloud services costs by up to 26% starting January 2024, affecting infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) services. The price hike will impact international customers more than their US counterparts. PaaS services which includes International Business Machines Corp (NYSE:IBM)’s Kubernetes Services and RedHat OpenShift, will see a 3% global increase. For IaaS offerings, bare metal servers, virtual server instances, file and block storage, and networking infrastructure will be affected. The price changes vary across international data centers, with the steepest increase at Sao Paulo, Brazil, at 7.5%.
Speaking of International Business Machines Corp (NYSE:IBM), the company is set to report its Q4 2023 results on January 24, with expectations of around $17.3 billion in revenue and earnings per share close to $3.76. Key drivers for International Business Machines Corp (NYSE:IBM)’s growth in the quarter are anticipated to be its core software operations, particularly with the growth in sales of Red Hat products and Data & AI solutions. Despite challenges in the IT spending market, International Business Machines Corp (NYSE:IBM)’s consulting business has performed well, witnessing a 6% year-over-year increase in Q3 sales. However, the infrastructure front might face challenges as demand for International Business Machines Corp (NYSE:IBM) mainframe computers could be impacted by weaker investments by large corporations amid high inflation and a mixed macroeconomic outlook.
Copyright: sifotography / 123RF Stock Photo
Methodology
Based on comprehensive data from the Bureau of Labor Statistics, we present a list of average salaries in the 25 states in US. The list is ascending from the lowest average annual salaries to the highest.
25. Ohio
Annual Average Salary: $56,530
Central Ohio’s economy in 2024 is predicted to face challenges like slower job growth compared to other regions and a potential mild recession, according to economist Bill Lafayette. He expects the overall economy to slow down, with inflation decreasing to the mid 2% range by the end of the year, potentially setting the stage for growth in 2025.
24. Texas
Annual Average Salary: $57,300
Texas is emerging as a leader in the US economy, outpacing many states in GDP and employment growth, according to a Wells Fargo analysis. Despite challenges in commercial real estate, the state experienced the third-fastest population growth in 2023, attracting residents from other states. Texas’ GDP growth of 7.7% in the third quarter of 2023 surpassed the national average of 4.9%, making the state as a “superstar economy.” While Wells Fargo predicts a slowdown in 2024, Texas’ long-term growth is expected to remain elevated.
23. Utah
Annual Average Salary: $57,360
Utah is a western state with stunning national parks and Mormon heritage. Domo Inc (NASDAQ:DOMO) and Zions Bancorporation NA (NASDAQ:ZION) are two of the largest companies in Utah.
22. Georgia
Annual Average Salary: $58,000
While the average cost of living in Georgia is $43,482 per year, according to SoFi, Georgia’s cost of living is 10% below the national average, with housing 20% lower and utilities 12% cheaper. Basic necessities like groceries and clothing are around 4% less expensive.
21. Michigan
Annual Average Salary: $58,000
The National Skills Coalition (NSC) has released data revealing that 89% of jobs in Michigan, from sectors like manufacturing, healthcare, and agriculture, require digital skills. The findings highlight a workforce readiness divide, with one-third of workers lacking foundational digital skills. The report coincides with the implementation of the $40 billion Broadband Equity Access and Deployment Program (BEAD) under the Bipartisan Infrastructure Law. It must be noted that the last measured GDP per capita for Michigan was $47,072 in 2018.
20. Pennsylvania
Annual Average Salary: $58,470
As of 2021, Pennsylvania has the sixth-largest gross state product (GSP) in the United States, totaling $839.4 billion, trailing behind California, Texas, New York, Florida, and Illinois. If Pennsylvania was an independent country, its economy would rank 22nd globally, with a per capita GSP of $64,751, placing it 24th among US states.
19. Arizona
Annual Average Salary: $58,620
Arizona’s economy, with a total gross state product of $373 billion in 2020, is moderately diverse, driven by sectors like health care, transportation, and government. The state’s per capita income is $40,828, ranking 39th in the U.S. Copper mining, part of the historic “five C’s” (copper, cotton, cattle, citrus, climate), still plays a major role. The major employment sectors in the state are trade, transportation, and utilities, as well as education, health services, and government. The last measured GDP per capita for Arizona was $43,464 in 2018.
18. Vermont
Annual Average Salary: $59,190
In 2021, Vermont’s median household income was $67,674. Despite being one of the states with high salaries, 10.3% of the population lived below the poverty line as of 2021. The 2022 median wage was $22.75 per hour for the state.
17. Hawaii
Annual Average Salary: $61,420
Honolulu, Hawaii, maintains a high cost of living but is 6.7% lower than New York City and 3.6% less than San Francisco. However, factors like increased travel costs and shipping fees add largely to living expenses. Hawaiian Electric Industries that provide 95% of electricity comes with high prices which are nearly three times the national average. In 2010, the median sale price of a single-family home in Honolulu was US$607,600, the highest in the US due to factors like the “sunshine tax” and increased shipping costs influenced by the Jones Act. Nevertheless, it is also one of the States That Don’t Tax Social Security Or Pensions.
16. Delaware
Annual Average Salary: $62,260
In 2020, Kiplinger’s study revealed that Delaware ranked seventeenth in terms of millionaires per capita in the United States, with a total of 25,937 individuals with a net worth crossing one million dollars. The median income for households in Delaware in 2020 was $64,805. Delaware is a state with no sales tax and a rich history.
15. New Hampshire
Annual Average Salary: $62,550
New Hampshire’s economy was valued at $86 billion in 2018 and ranked 40th in the US, with a diverse base constituting of real estate, professional services, manufacturing, government, and healthcare. Despite a historical reliance on textiles and shoemaking, the state now experiences growth in GDP, with a 2.2% increase in 2018. Renowned for its lack of broad taxes, New Hampshire relies on property taxes, and it also has low energy consumption. Unemployment is low at 2.4%, and the state’s major employers are Dartmouth-Hitchcock Medical Center, Fidelity Investments, and BAE Systems North America. The average Cost of Living in New Hampshire is $56,727 per year.
14. Oregon
Annual Average Salary: $62,680
Oregon hosts major corporations across different industries. Nike Inc (NYSE:NKE) world headquarters in Beaverton employs around 5,000, consistently ranking as a top employer. Medford is home to Harry and David, known for gift items, and Lithia Motors’ national headquarters. Portland houses Graphic Arts Center Publishing and Adidas Corporation’s American Headquarters, employing 900.
13. Minnesota
Annual Average Salary: $63,640
Often known as the land with 10,000 lakes, the state is the country’s biggest producer of sugar beets and sweetcorn. Target Corp (NYSE:TGT) and UnitedHealth Group Inc (NYSE:UNH) are two of the largest companies present in Minnesota. The annual average salary in the state is $63,640.
12. Illinois
Annual Average Salary: $63,930
The state is a major transportation hub, with the Chicago O’Hare International Airport being one of the most profitable airports globally. It ranks 12th on our list of US states with highest average salaries.
11. Rhode Island
Annual Average Salary: $64,530
Citizens Financial Group, the 14th largest US bank, is headquartered in Providence. CVS Caremark and Textron, Fortune 500 companies, are based in Woonsocket and Providence. Rhode Island hosts Fortune 1000 companies including FM Global, GTECH Corporation, Hasbro, American Power Conversion, Nortek, and Amica Mutual Insurance, contributing to the state’s economic landscape.
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Disclosure: None. 25 States with Highest Average Salary in America is originally published on Insider Monkey.
