States With The Highest Average Salary
As was recently covered by Money Digest, the most expensive states to live in include the usual suspects like California and Hawaii, but the list also includes Oregon, Alaska, and Massachusetts. And, according to data from the Bureau of Labor Statistics, each of these states (as of March 2024) is in the top 15 when it comes to average salary, with the highest-earning state in the United States being Massachusetts.
Per the statistics bureau, the average hourly pay in Massachusetts is $40.80. Extrapolating this average for a 40-hour workweek, it comes to $84,864 a year. Using the same math for the median weekly earnings for the first quarter of 2024, $1,139, the national median salary is $59,228, or around 30% less than what Massachusetts residents earn per year.
The average annual salary for people living in the District of Columbia is actually around $21,000 more than Massachusetts, but keeping this discussion strictly to the 50 states, Massachusetts is first, followed by Washington at $84,635, California at $80,350, Colorado at $78,561, and New York at $78,041. It should be noted that, per the bureau's data, the average weekly hours for every state is below 40/week; if the actual weekly hours per state were used, Massachusetts would switch places with Washington, as Washington residents work, on average, one hour more per week (34.3) than those from Massachusetts.
Massachusetts is first for average pay
In December 2023, the Census Bureau shared its latest brief on household income in the states and metropolitan areas for 2022. According to the report, the median household income in the U.S. in 2022 was $74,755 (around 2% more than what the average annual expenditures for U.S. consumers was in 2022, per the BLS). According to this data, Massachusetts wasn't the top earner in the country for the year; rather, with a median household income of $94,488, the Bay State was third, behind New Jersey ($96,346) and Maryland ($94,488). Massachusetts was second (to Maryland) in 2021.
Based on average salary, however, Massachusetts today is first. Its average hourly pay of $40.80 is slightly higher than Washington's at $40.69, and $2.17 more than California (though California has a population that's 82% greater than Massachusetts). This said, these three states all have in common cities with tech hubs (San Francisco, Seattle, and Boston), meaning, they have an outsized share of the highest-paying jobs in the U.S.
Further, Massachusetts is home to schools Harvard and the Massachusetts Institute of Technology — the No. 3 and No. 2 universities in the nation, per U.S. News & World Report's 2024 Best Colleges Rankings. While students may not stay in the area once they graduate, it's not a stretch to think that many will, and continue to fill open positions for high-paying jobs in tech, medicine, and business.
States with the lowest salary averages
On the other side of the discussion, states with the lowest average salary are led by Mississippi and its average hourly pay of $25.99. For a 40-hour workweek, this comes to an average of $54,059, or 8.7% less than the median salary for the United States. According to the Bureau of Labor Statistics' March 2024 numbers, Mississippi is followed on the list by New Mexico, West Virginia, Arkansas, and Louisiana.
Further, while the 2022 Census Bureau data on median household income was a bit different at the top, Mississippi was also the state with the lowest median household income for the year, at $52,719. Compared to the national median household income, the difference for Mississippi was even greater than the average salary metric, with The Magnolia State having a median household income 29.4% less than the nation's.
Of course, another factor to think about when it comes to salary is cost of living. As mentioned, it's expensive to live in states like California, Hawaii, and Massachusetts. On the flip side, it's less pricey to live in a state like Mississippi, which, not surprisingly, is among the cheapest states in the U.S. to retire. In fact, according to the Missouri Economic Research and Information Center's ongoing Cost of Living Data Series, Mississippi, with a cost of living index of 86.3, is the second-most affordable state to live in, just behind Oklahoma (86.2).