In this article, we look at 25 states with the lowest poverty rates in America. You can skip our detailed analysis on poverty in the United States, and head over directly to the 10 States with the Lowest Poverty Rates in America.
Poverty rate in the United States has continued to steadily decline over the last decade. 11.2% of the population lived below the poverty line, $27,479 for a family of four, in 2021, compared to 14.8% in 2011, according to the Census Bureau. In terms of demographics, communities most affected by poverty in order are the Native Americans, African Americans, and Hispanics. Similarly, geographically, there are states that are poorer than some of their wealthy counterparts.
New Hampshire has the lowest poverty rate in the US among all 50 states. It is followed by Minnesota and New Jersey at second and third on the list of states with the lowest poverty rates. On the opposite side of the spectrum, Mississippi is the poorest state in the US having the highest poverty in the country with a population of 18.1% living below the poverty line.
The United States is divided by its stark income inequality. One factor why poverty rates are low in some states compared to others is significant corporate presence in these states which leads to production of jobs and economic opportunity. This factor also indicates that these states are business friendly and have optimal economic policies in place.
Maryland is one example. It is not just among the states with the lowest poverty rates, but is also one of the wealthiest states in America in terms of household income. There are at least 10 billionaires and more than 220,000 millionaires in the state.
The world’s largest hotel chain, Marriott International, Inc. (NASDAQ:MAR) is headquartered in Bethesda, Maryland. It has over a 100 hotels in the state of Maryland, providing employment to thousands of residents in the hospitality industry. Marriott International, Inc. (NASDAQ:MAR) reported a net income of $757 million in the first quarter of 2023, earing $2.43 per share.
Likewise, the state of New Jersey is home to Johnson & Johnson (NYSE:JNJ), a leading American multinational corporation that produces pharmaceutical, medical, and consumer packaged goods, and is a source of employment for the local community. It was founded in 1886 in New Brunswick, New Jersey, where it still has its corporate head office. The consumer division of Johnson & Johnson (NYSE:JNJ) is located in Skillman. The company is part of the Fortune 500 list of companies in the US having the highest revenue. Merck, Bed Bath & Beyond, and Cognizant are other prominent companies that are headquartered in the state, and contribute to the region’s economic success.
Virginia, which is in our list of states with the lowest poverty rates, has some of the biggest defense companies based in the state. One of them being the aerospace and armament manufacturer, General Dynamics Corporation (NYSE:GD) which is headquartered in Reston. It is one of the largest defense contractors of the U.S. Department of Defense. In 2022, General Dynamics Corporation (NYSE:GD) had a revenue of close to $40 billion, and received more than $21 billion in DoD contracts. You can read more about the biggest companies in Virginia in our article here.
At the same time, several corporations such as Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Wells Fargo & Company (NYSE:WFC) are also undertaking voluntary initiatives to accelerate economic growth in areas with high poverty rates. TechSpark, a program launched by Microsoft Corporation (NASDAQ:MSFT), to provide digital access and skills to residents of rural areas has enabled 88% of the schools in Northeast Wisconsin to offer Computer Sciences education, which bodes well for their future career prospects.
Apple Inc. (NASDAQ:AAPL)’s Employee Giving Program, which started in 2011 has already raised $880 million for people going through difficult times such as stress, poverty, or violence. The company matches dollar payments contributed by its employees in this cause, and also raises money in the pool for every hour volunteered by an Apple Inc (NASDAQ:AAPL) employee to help those in need.
Another fine example is that of Wells Fargo & Company (NYSE:WFC), which is one of the leading financial institutions in the United States. In 2021, Wells Fargo & Company (NYSE:WFC) announced to spend $15 million in collaboration with a non-profit organization named ideas42 to help alleviate cost burdens and foster economic activities in regions regarded as middle or low income.
Methodology
We have used U.S. Census Bureau’s three-year average poverty rates between 2019-2021 to rank the states with the lowest poverty rates in America. This is the latest official data available on the subject. In the case of poverty rates being equal for two or more states, the percentage change in poverty rates from the last census, which covered poverty data between 2018-2020, were used to act as a tiebreaker to rank one over the other.
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Let’s now head over to the list of states with the lowest poverty rates in America.
25. Hawaii
Poverty Rate: 10.1%
Hawaii is located 2,000 miles from the U.S. mainland, in the Pacific Ocean. In 2021, it was estimated to have a poverty rate of 10.1%, up from 9.5% in 2020. Despite the increase, it is among the states having the lowest poverty rates in America.
24. Pennsylvania
Poverty Rate: 10%
Pennsylvania is considered the sixth richest state in the U.S., having over 300,000 millionaires. You can read more on this in our article, 20 Wealthiest States in America. In 2021, it had a poverty rate of 10%, which was below the national average in the U.S.
23. Delaware
Poverty Rate: 9.6%
Delaware’s poverty rate has risen from 7.6% in 2019 to 9.6% in 2021. However, it still manages to remain a wealthy state with a low poverty rate compared to most other states in the U.S. Delaware is known in the U.S., and around the world, for its STEM-based industries, high standard educational institutions, and the financial services sector, all three of which help drive its economy. Many businesses get incorporated in Delaware due to the reputation for its corporate law and Delaware chancery court. You can read more about it in our list of the most litigious companies in the US.
22. Iowa
Poverty Rate: 9.5%
Iowa is in the Midwest of the United States. It had a poverty rate of 9.5% in 2021 according to the Census Bureau. Wells Fargo & Company (NYSE:WFC) is one of the largest employers in Iowa, employing at least 12,000 people in the state capital, Des Moines.
21. Wyoming
Poverty Rate: 9.4%
Poverty rate in Wyoming was recorded at 9.4% in 2021 by the U.S. Census Bureau, remaining unchanged from the previous year. Close to 600,000 Americans live in the state.
20. Illinois
Poverty Rate: 9.3%
Home to the world’s first McDonald’s, Illinois is a state in Midwestern United States which is a popular travel destination. Millions of tourists from around the world visit Chicago annually and help the region generate tourism revenue and boost the economy. In 2021, the state had an estimated 9.3% of its population living below the poverty line.
19. Connecticut
Poverty Rate: 9.2%
The U.S. Census Bureau recorded Connecticut’s poverty rate at 9.2% in 2021. It is located in the northeastern corner of the country, and is popular for being the home of sports channel, ESPN. Poverty in the state dropped by 7% from the previous year.
18. Maine
Poverty Rate: 9.2%
Maine tied Connecticut on poverty rates, but experienced a higher reduction in poverty levels (8%) between 2020 and 2021, due to which it is ranked higher on our list. Its capital city is Augusta.
17. North Dakota
Poverty Rate: 9.1%
North Dakota is located in the upper Midwest, and is popularly known for the Theodore Roosevelt National Park. An estimated 9.1% of its residents live below the poverty line, which is lower than the national average in the United States. Poverty is on a downward slope in the state, having come down from 10.1% in 2019.
16. Rhode Island
Poverty Rate: 9%
Rhode Island ranks among the list of the U.S. states having the lowest poverty rates, recorded at 9% in 2021 by the Census Bureau. In 2019, poverty was estimated at 9.8%. This trend of declining poverty is also seen in Providence, which is the poorest city in Rhode Island with a poverty rate of 22.1%. The city has experienced an increase in median household income by 13.7% between 2020 and 2021. You can read more on this in our article, 25 Poorest Cities In The US That Are Getting Poorer.
15. Oregon
Poverty Rate: 8.9%
Oregon, located in the Pacific Northwest region of the country, is known for its diverse landscape. Poverty in the state declined by 2.2% between 2020 and 2021, which is a step in the right direction for Oregon. An estimated 8.9% of the people live in poverty.
14. Colorado
Poverty Rate: 8.9%
Colorado is next on the list of states with the lowest poverty rates in America. Poverty rate for the state was recorded at 8.9% in 2021, dropping by 4.3% from the previous year. The state is home to a number of large corporations, including Arrow Electronics, Inc. (NYSE:ARW) which is a Fortune 500 company that specializes in selling and offering value added services pertaining to computer products. Arrow Electronics, Inc. (NYSE:ARW) is headquartered in Centennial, Colorado.
13. Virginia
Poverty Rate: 8.8%
Next up is Virginia, where poverty rate was recorded at 8.8% in 2021 by the Census Bureau. The state has a median household income in excess of $80,000 which is higher than the national average in the United States. Virginia is home to General Dynamics Corporation (NYSE:GD), one of the largest companies in the defense industry.
12. Wisconsin
Poverty Rate: 8.6%
Poverty in Wisconsin has grown by 3.3%, from being recorded at 8.3% in 2020 to an estimated 8.6% of the population living below the poverty line in 2021. Manufacturing, agriculture, and tourism are the main drivers of Wisconsin’s economy, which is why it ranks among the states with the lowest poverty rates in the United States.
11. Kansas
Poverty Rate: 8.6%
Kansas had a poverty rate of 8.6% in 2021, down from 8.7% in the previous year. Kansas is a landlocked state, bordered by Nebraska, Missouri, Colorado, and Oklahoma. It is an agricultural state, that produces high volumes of soybeans, wheat, sorghum, and corn.
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Disclosure: None. 25 States with the Lowest Poverty Rates in America is originally published on Insider Monkey.