Average Salary by State: Who Will Get Paid the Most in 2020?

Which states offer the best employment opportunities?

We analyzed the average salary by state.

And came up with a map:

This Map Shows the Average Salary by State

Explore for yourself:

Average Salary by State - A Map

That, on its own, only tells part of the story. So, we dug deeper. We looked at how much salaries increased between 2018 and 2019. We also had a look at the overall unemployment rate. These two stats together speak towards the overall economic growth present in the state.

Now:

To create our list, we sorted it in order of the average income by state per person per year.

And as if this isn’t enough, we also made a list of the top 20 states with the highest average salary. You’ll see that we’ve listed the:

  • Average Annual Salary
  • Percentage Increase Between 2018 and 2019
  • Rate of Unemployment
  • The job growth rate between 2017 and 2018

We’ve followed this up with interesting facts related to the employment opportunities in each state. Before we get to the main statistics, though, let’s look at some of the national averages first.

What Is the Average Annual Income in the US?

We took the average amount per state per annum and then worked out the average accordingly. The average for 2019 is $52,276. While this is a good metric to consider, we have to note that a salary comparison based on it alone is not entirely accurate.

Here’s why:

When you consider that each state in the United States has different policies in terms of income tax and sales taxes, it becomes more complex. Getting to know the system of government can make it easier to understand.

How Do Taxes in the US Work?

Tax can have a significant effect on the average hourly wage. There’s more than just personal income tax to consider here – sales tax also erodes earnings.

The taxation system in the country is complex. Everyone is subject to taxation by the federal government. These rates are the same irrespective of where you live. Where it gets complicated is at the state level.

Here’s the thing:

Each state is allowed to levy taxes as it sees fit. Some charge sales taxes and income tax as a way to spread the load. Others might opt to rely on property taxes instead. No comparison of salaries in different states is complete without understanding the tax burden that is placed on different sectors of the population.

Check this out:

If you’re a struggling graduate, a state that has no sales tax or personal income tax might be appealing. In that area, Alaska performs well. According to Investopedia, Alaska offers the lowest overall tax rates.

In Alaska, the total tax burden, with all taxes taken into account, comes in at 5.10%. The tax rate is lower to encourage investment in what is a very remote area. So, in Alaska, you get to take home more of the average wage by state.

If you’re planning on buying property, though, the landscape changes. South Dakota, for example, doesn’t charge sales tax. It does, however, make this up by charging high property tax.

Key takeaway:

When researching which state to live and work in, it’s important to thoroughly check the taxes being charged. 

What is the National Rate of Unemployment in the US?

The national average of unemployment stands at 3.7% in 2019. This metric is important to consider when you’re comparing salaries by state. In terms of income, average salaries in Alaska are higher than the national average.

But, at 6.5%, the high unemployment rate paints a picture of a state that might be in trouble. This casts a very different light on the potential job opportunities in the state.

Which State Has the Highest Job Growth Rate in the US?

According to Statista, that honor goes to Nevada for a job growth of 3.4% between 2017 and 2018. By contrast, Alaska has a negative growth rate of -0.6% during the same period. This and the high unemployment rate in the state puts Alaska in the running for the title of one of the poorest states in the US. Or, at the very least, on our list.

The average growth rate nationally for this period was 1.22%.

Average Salary by State: The Top 20

Now that you have the big picture, let’s break down the top states to get paid.

 1. District of Columbia

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $81,882           
  • Percentage Increase Between 2018 and 2019: 3.50%
  • Rate of Unemployment: 5.6%
  • Job Growth Rate Between 2017 and 2018: 1%

The District of Columbia is most famous for housing the nation’s capital, Washington. In fact, the two have been coterminous ever since Arlington County was ceded back to Virginia in 1846. The presence of the federal government, alongside a large number of national and international institutions, is one of the reasons that the average salary in DC is higher than anywhere else. The District has been ranked by Oxfam as the best jurisdiction for workers.

What’s more:

It also comes in first on our list of average household income by state. The city’s economy is growing, and there are many opportunities for employment. DC is in the enviable position of being able to offer consistent, well-paid employment.  

This is because federal employees remain employed even in an economic downturn – unless there is a federal government shutdown. There are also a lot of opportunities outside of the federal government. Many firms headquarter their businesses there to stay close to the seat of power. 

While the district itself is small in size and population, the Washington, DC metropolitan area extends over much of nearby Maryland and North Virginia and has a population of over six million people. This makes it one of the richest states in the country.

2. Connecticut      

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $74,561           
  • Percentage Increase Between 2018 and 2019: 1.50%
  • Rate of Unemployment:  3.90%
  • Job Growth Rate Between 2017 and 2018: 0.1%

The economy of the state took a knock in 2016 and 2017, which had a serious impact on job opportunities. Fortunately, things took a turn for the better in 2018, and employment opportunities have been rising slowly since then. Hartford and New Haven have shown the best economic recovery.

Even though the Constitution State comes second in terms of the average salary by state, its job growth rate might be a concern.

Keep in mind that Ney York is also one of the states with the most billionaires.

3. Massachusetts – The Best State to Start Your Career In

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $70,073           
  • Percentage Increase Between 2018 and 2019: 2.70%
  • Rate of Unemployment:  3.00%
  • Job Growth Rate Between 2017 and 2018: 0.9%

According to Bloomberg, Massachusetts is the place for young and upcoming people to start their careers. California offers more job opportunities, but Massachusetts offers a better quality of life.

Here’s why:

The state’s reasonable cost of living, combined with interesting employment opportunities, means it trumps all other states for job seekers.  This is despite not coming first on our list of the highest median wage by state.

4. New York

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $68,667           
  • Percentage Increase Between 2018 and 2019: 1.70%
  • Rate of Unemployment:  4.10%
  • Job Growth Rate Between 2017 and 2018: 1.1%

Who doesn’t want to live in the Empire State? Home to the Big Apple, this state offers some interesting employment opportunities. According to Bloomberg, the city is becoming more popular amongst graduates starting out. New York City might even have San Francisco sweating, as it’s fast eclipsing Silicon Valley as the spot for hip young people on the move. New York comes in higher than California in our salary comparison by state.  

5. New Jersey

 (Source: Bureau of Labor Statistics)

  • Average Annual Salary: $67,609           
  • Percentage Increase Between 2018 and 2019: 3.20%
  • Rate of Unemployment:  4.10%
  • Job Growth Rate Between 2017 and 2018: 0.9%

The economy of New Jersey is good. Most of the state is part of the NYC metropolitan area, and this can be advantageous for job seekers. Additionally, the cost of living in the state is lower than that of New York City. There’s an increasing need for health care assistants, such as physical therapy assistants.

The downside is that residents of this state pay the highest taxes in the country. The average yearly income is also higher than most other states.

6. Maryland

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $62,914           
  • Percentage Increase Between 2018 and 2019: 3.60%
  • Rate of Unemployment:  3.80%
  • Job Growth Rate Between 2017 and 2018: 0.7%

Maryland boasts some of the wealthiest households in the country. Part of the attraction here is that it’s close to DC. Moreover, if you want to work in bio-research or the aerospace/defense industries, this is a good place to start. If you’re highly qualified in one of these areas, you’ll easily exceed the salaries listed in our average wage by state list.

You’re also in luck if you’d like to work for the federal government, as it has a lot of satellite branches in Maryland.

7. California

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $62,586           
  • Percentage Increase Between 2018 and 2019: 3.10%
  • Rate of Unemployment:  4.30%
  • Job Growth Rate Between 2017 and 2018: 2%

California is home to Silicon Valley. It’s also the most populous state with the largest economy. As a result, the average income in California is fairly high. Interestingly enough, though, the rate of unemployment is slightly higher than the national average. This could be due to an influx of hopeful job seekers.

You might be wondering:

Is it the best place for young people starting their careers? 

According to Bloomberg, thanks to the high cost of living, it’s not. As we mentioned earlier, that honor goes to Massachusetts. While Silicon Valley still attracts a lot of young hopefuls, New York is becoming more popular because it offers a wider range of opportunities.

Fun fact: California is among the top states in terms of credit card debt.

8. New Hampshire

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $61,405          
  • Percentage Increase Between 2018 and 2019: 3.80% 
  • Rate of Unemployment:  2.40%
  • Job Growth Rate Between 2017 and 2018: 0.8%

The state has one of the lowest unemployment rates on this average salary by state list. What’s their secret? A strong economy. The state is very business-friendly, and this could also contribute to the lower unemployment rate. As a resident, you don’t pay state income tax or a general sales tax. This makes the cost of living more reasonable.

9. Washington  

 (Source: Bureau of Labor Statistics)

  • Average Annual Salary: $60,781         
  • Percentage Increase Between 2018 and 2019: 4.30% 
  • Rate of Unemployment:  4.60%
  • Job Growth Rate Between 2017 and 2018: 2.6%

Washington State also ranks high on our list. It’s also one of the largest states by area. According to Oxfam, it comes in second on Oxfam’s list of the best states for workers. The minimum wage in the state is almost double the federal limit.

10. Wyoming

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $60,095          
  • Percentage Increase Between 2018 and 2019: 2.10%
  • Rate of Unemployment:  3.70%
  • Job Growth Rate Between 2017 and 2018: 0.7%

When it comes to states with the highest income, Wyoming is an interesting one. According to Oxfam, it’s 34th in terms of the best states for workers. The state boasts a lot of smaller towns, and this could be part of the reason that working conditions are less than optimal. Many young people in the state opt to move to more prosperous and populous regions.

11. Alaska 

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $59,687          
  • Percentage Increase Between 2018 and 2019: 4.90% 
  • Rate of Unemployment:  6.50%
  • Job Growth Rate Between 2017 and 2018: -0.6%

80% of Alaska’s income comes from petroleum extraction. The seafood industry is also big here. The Last Frontier has also spent time promoting tourism, so if packing fish is not your cup of tea, there are alternatives.

Unfortunately, it also has the highest unemployment rate on this salary comparison list. The reason? Some industries shut down during the long, cold winter, and this reduces opportunities. Drugs are also considered a problem in this state.  

12. Virginia

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $56,952          
  • Percentage Increase Between 2018 and 2019: 3.80% 
  • Rate of Unemployment:  2.90%
  • Job Growth Rate Between 2017 and 2018: 1.1%

According to Oxfam’s ratings, the Old Dominion comes last in terms of being the best place to work. Part of the problem is that this is an at-will state, meaning that employers can terminate employment without due cause. They can’t fire employees for discriminatory reasons, but that’s the only restriction.

Interesting fact:

Defense spending in this state is one of the highest in the country. As a result, the defense industry contributes almost 900 000 jobs. Northern Virginia is the most populous area because of its proximity to DC.

The town also performs badly when it comes to the average cost of living by state. The cost of living is quite high here.

13. Illinois

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $56,933          
  • Percentage Increase Between 2018 and 2019: 2.00%
  • Rate of Unemployment:  4.40%
  • Job Growth Rate Between 2017 and 2018: 0.9%

Illinois ranks as one of the leading manufacturing states. Unfortunately, according to U.S. News, the state comes 35th in terms of the best states to live. They came 22nd in terms of opportunities available, so that’s good. The job market is a competitive one, so be prepared.

The state doesn’t feature in the top ten of our list of median income by state. At the same time, though, the average salary is higher than the national average.  

14. Colorado

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $56,846          
  • Percentage Increase Between 2018 and 2019: 3.40%
  • Rate of Unemployment:  3.50%
  • Job Growth Rate Between 2017 and 2018: 2.4%

This state is home to a lot of federal agencies, including NORAD and the United States Airforce Academy. Home to the booming city of Denver, U.S. News ranks the Centennial State as having the best economy in the country. The job growth rate is one of the highest in the country, even though it appears quite low on our average income in each state.

15. Minnesota

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $56,374          
  • Percentage Increase Between 2018 and 2019: 2.00%
  • Rate of Unemployment:  3.20%
  • Job Growth Rate Between 2017 and 2018: 0.8%

The world-famous Mayo Clinic operates here and is ranked as one of the state’s largest employers. As a result, the medical industry is strong here. If working in the medical industry doesn’t suit you, the state also has a strong retail and manufacturing industry.

It ranks as the 3rd best state for job opportunities and has a job growth rate of 0.8% per annum. It might not rate highly in terms of average annual income, but U.S. News ranks Minnesota as the third-best state to live in.

16. Pennsylvania

(Source: Bureau of Labor Statistics)

  • Average Annual Salary:   $55,349                                   
  • Percentage Increase Between 2018 and 2019: 3.50% 
  • Rate of Unemployment:  3.90%
  • Job Growth Rate Between 2017 and 2018: 1.1%

The Snack Food Capital of the World boasts a wide range of industries in addition to the manufacture of snack foods and the famous Philly Cheese Steak. In fact, as many as 50 Fortune 500 companies have their headquarters in the state. Job growth in the state is pretty good at 1.1%.

17. Hawaii

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $45,565          
  • Percentage Increase Between 2018 and 2019: 3.50%
  • Rate of Unemployment:  2.80%
  • Job Growth Rate Between 2017 and 2018: 0.5%

Aside from being a tropical paradise, Hawaii is a pretty good place to find a job, offering a decent average yearly income. It has an unemployment rate below the national average. Job growth is okay at 0,5%. Unfortunately, the state ranks very low in terms of cost of living because, tropical fruit aside, most foodstuffs have to be brought in from the mainland.

18. Rhode Island

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $54,523          
  • Percentage Increase Between 2018 and 2019: 1.70%
  • Rate of Unemployment:  3.80%
  • Job Growth Rate Between 2017 and 2018: 0.5%

The health services industry is the primary industry in the Ocean State. If you want to pursue a career as a healthcare professional, this is a good place to start. Tourism is also big in the state. Job growth in the state is average at 0.5%. It also comes in 7th on the Oxfam list of the best states for workers. There are good opportunities here, ас our list salaries in different states also shows.

19. North Dakota

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $54,306          
  • Percentage Increase Between 2018 and 2019: 2.70%
  • Rate of Unemployment:  2.30%
  • Job Growth Rate Between 2017 and 2018: 0.6%

North Dakota’s job growth has stagnated over the last few years. Currently, it’s standing at 0,6%. That said, studies have shown that the state is a popular destination for job seekers. This could be because the state has a strong record of job creation.

While job growth might have stagnated, there are still many opportunities for job-seekers. The median salary is still higher than the average US salary.

20. Vermont

(Source: Bureau of Labor Statistics)

  • Average Annual Salary: $53,598            
  • Percentage Increase Between 2018 and 2019: 4.50% 
  • Rate of Unemployment:  2.30%
  • Job Growth Rate Between 2017 and 2018: 0.2%

Vermont is one of the success stories on this list. Ten years ago, the economy was in pretty poor shape and it was listed as one of the states with the worst economies in the country. Now it ranks as having the 29th best economy in the country. Still, it comes in as the worst performer on our average wage by state list.

However:

It’s been ranked by Oxfam as the fifth-best state to work in. Opportunities in the state are good at the moment. The cost of living is high in the state, and this should be taken into consideration.

Wrap Up

That wraps up our list of the twenty states with the highest income on average. We hope that you’ll find the information useful and interesting. We’d just like to add one last word of caution – you can’t simply choose the District of Columbia as your top pick because it tops the list of the average salary by state.

Also, consider additional factors like the quality of life, cost of living, and job growth. As always, it’s a good idea to do extensive research before heading off to a new city with rose-tinted glasses on. 

ABOUT AUTHOR

Fiona worked in the retail banking industry for 16 years. She felt that she could put her experience to good use in helping small businesses grow. Web writing was a great fit and sparked a new career for her. She believes that her flexible working schedule gives her more time to spend painting. She loves being at home all day with her schnauzers and her cat. For Fiona, it's furbaby Friday every day of the week.

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