Researchers at the Urban Institute compared inflation-adjusted state median household incomes in 1970 and 2023. “We think of one U.S. economy,” says Brady Meixell, co-author of the report. “But the data are showing not quite 50 economies, but states moving in very different directions.”
One of the biggest shocks, he says, was seeing real income drop in West Virginia over the last 53 years, if only by 0.4 percent. At the other end of the scale, median income increased nearly 80 percent in Utah during this period.
The other big paradox, Meixell says, is that the common assumption that population growth equals income growth is not born out by the data. “Nevada is a rapidly growing state, but a lot of those jobs have been in low wage industries," he says. Income grew faster in 36 states than it did in Nevada.
The decline in manufacturing in Midwest Rust Belt states over the past 50 years is reflected in low growth rates there. In general, Western states, New England states, Texas and Florida saw the most growth. The two factors most associated with growth were increasing percentages of foreign-born residents and residents with a bachelor’s degree, Meixell says.
In the west, California, Arizona and Colorado all saw real household income increase more than 60 percent. (Virginia and New Hampshire were the only other states to achieve this.)
Median income ranged from $54,203 in Mississippi to $99,858 in Massachusetts. The researchers did not attempt to evaluate relationships between income levels and cost of living in each state, or how income increases in individual states compare to increases in the cost of living in them since 1970.
Last year, Consumer Affairs compared major household costs in 1973 and 2023, the time period covered by the Urban Institute study. Adjusted for inflation, the median home price has increased 83 percent over the last 50 years, median rent 53 percent. (This national average doesn’t account for state-by-state variation.)
“I like thinking about how you fold in the cost of living as the other side of the coin,” Meixell says.
