Best and Worst States to Make A Living 2016
Is your career failing to provide you with the opportunities you want or can’t find a job out of college? The problem might not be you or your profession, but your location. The latest MoneyRates study found strikingly different conditions for making a living from one state to another.
What do you think it takes to make a good living?
A nice income helps, but how valuable that is depends on the cost of living. Of course, the degree of difficulty in getting a job is a factor that varies depending on where you live, as does the tax rate. Then there are workplace issues, such as an unsafe job environment, that may not be worth any amount of extra income.
MoneyRatesbined all of the above factors to figure out which states are the best places for making a living – and which are the worst.
Study Highlights
- Wyoming came out on top for 2016 on the strength of its combination of high median wages with low cost of living and no state income tax.
- Hawaii was named the Worst State to Make a Living for the sixth year in a row for its high cost of living, 68.6 percent above the national norm, and one of the highest state tax burdens.
- Delaware dropped out of the top 10 and Minnesota entered the Best States list compared to 2015.
Best States to Make a Living 2016
Here are the top 10 best states for making a living:
1. Wyoming
Surprised to see Wyoming take the top spot? It has a small population so there is a good chance you’ve never thought of pursuing a career in Wyoming, but conditions there stack up as the best in the country for making a living. After finishing third in best state rankings last year, Wyoming is now the No. 1 state to stretch your dollars. What makes Wyoming so great? The median income is above average at $38,280 and goes especially far because of the state’s low cost of living and lack of state income tax.
2. Washington
Washington continues to reign as the No. 2 best state since last year. While the state has a higher-than-average cost of living, the median salary of $42,190 is well above the national average to make up for it. Also, states like Washington that have no income tax have a big advantage in this analysis. Based on the median income from state to state, the typical state income tax burden is 3.71 percent. Having no such burden gives take-home pay in states like Washington an automatic leg up.
3. Virginia
Like Wyoming, Virginia benefits from an above-average median income and a below-average cost of living. State tax rates are a little on the high side, but unemployment is below average at 4 percent so job prospects are better than in the typical state. Also, once you get a job the work environment should be favorable, as Virginia ranks in the top 10 states for workplace safety with just three workplace incidents per 100 workers.
4. North Dakota
For several years now, North Dakota has been an enjoying an economic boom that has made it a great place for job opportunities, though that may be starting to fade a little. Much of that boom was linked to the oil and gas industry, and with energy prices down, conditions might get tougher. Still, North Dakota features above-average wages and one of the lowest unemployment rates in the nation at 3.1 percent. Also, among states that have an income tax, North Dakota’s places the lowest percentage burden on median wage earners.
“There are places in the country that job-seekers are naturally attracted to, and Wyoming or North Dakota are probably not on most people’s lists,” says Richard Barrington, senior financial analyst for MoneyRates and author of the study. “However, sometimes you have to look off the beaten path to find opportunity.”
5. Texas
Texas dropped to No. 5 after landing the top spot in 2015, but its economic strengths mean it’s still solidly in the top 10. The median wage in Texas is a little below par, but so is the cost of living. Also, with no state income tax, workers get to keep more of what they earn. The job market in Texas is a little stronger than in most states, and it has the second-lowest frequency of work-related injuries and illnesses at 2.6 workplace incidents per 100 workers.
“Sometimes you have to look off the beaten path to find opportunity.”
6. Ohio
The median wage in Ohio is close to the national average, but with a low cost of living, workers get more for their money. State tax rates are also very low with state tax on median income reaching $731.29, and a top-10 ranking for workplace safety is another positive.
7. Michigan
Parts of Michigan have had some very well-documented economic problems, so it might surprise you to learn that the state’s unemployment rate is right around the national average, as is Michigan’s median income. The real strength is one of the cheapest costs of living in the nation, with the cost of living index measuring 91.2, which makes an median income stretch further than in most states.
8. Colorado
What stands out most about Colorado as a place to make a living is that it has the third-lowest unemployment rate in the country. As you might expect from a place where labor is in high demand, the median wage is well above the national average at $38,800. Unlike some high-wage states, the cost of living in Colorado is about typical of the rest of the nation.
9. Illinois
The combination of an above-average median wage and below-average cost of living is a powerful one for helping a household’s budget go further. Illinois also grades pretty well on workplace safety. Despite these points, Illinois dropped to ninth place after ranking fifth in 2015. The catch, though, is that it is not always easy to find a job in the state, as it has one of the higher unemployment rates nationally at 6.5 percent. However, unemployment is less of a differentiating factor in this study than in years past because as the job market has improved nationally, the differences between state unemployment rates have shrunk.
10. Minnesota
Cracking the top 10 for both median wage and for low unemployment rate were the keys to Minnesota making the top 10 overall in this study after barely missing the best states list last year. The biggest caveat is the state tax burden, which is among the highest in the nation, as state tax on median income is reported as $2,312.28.
“It’s important to recognize that each state has strengths and weaknesses, and decide what is important to you.”
It should be noted that no state ranked near the top across all categories, so the quality of career opportunities may depend on both what you do and what matters most to you.
Generally speaking though, if you are just getting out of school or looking to change jobs, any of the above states might be a good place to consider if where you live currently is not providing good opportunities.
“One of the revealing things about a multi-factor study is that there is more than one path to success,” says Barrington. “For any given individual, choosing where to pursue a career might not be so much a matter of the state’s overall ranking as about which categories the state did well or poorly in. It’s important to recognize that each state has strengths and weaknesses, and decide what is important to you.”
Worst States to Make a Living 2016
Being able to distinguish the problem states from the ones providing strong opportunities might help you make a timely strategic relocation.
Here are the top 10 worst states:
1. Hawaii
With its welcoming atmosphere, you may be surprised to find Hawaii ranks as the worst state, but this study is about the best places to make a living, not the best places to live. If you have already made your fortune, then by all means go to Hawaii and enjoy its warm climate and spectacular natural beauty. However, if you are just trying to make a living, the biggest problem you’ll run into is the cost of living. Island economies tend to be pricey because many everyday needs have to be shipped in. At 68.6 percent above the national norm, Hawaii’s cost of living is the highest of any state. Zillow reports the median home value in Hawaii is $556,200 – almost three times higher than No. 1 Wyoming’s median home value at just $193,300, according to the latest data as of March 31. Add to that the third-heaviest percentage state tax burden, and your hard-earned dollars won’t go very far.
2. Oregon
While the cost of living isn’t nearly extreme as Hawaii’s, it is some 29.5 percent higher in Oregon than in the nation as a whole. On top of that, Oregon’s state tax burden for the typical wage earner is the highest in the nation. Making a decent living is hard when taxes take a big chunk off the top and then the cost of living waters down the impact of your money. One final concern about Oregon as a place to make a living is that the frequency of workplace-related injuries and illnesses is on the high side.
3. West Virginia
The nature of the difficulty with making a living is different in West Virginia than in Hawaii and Oregon. The cost of living and the state tax burden for median wage earners in West Virginia are about the norm for the rest of the United States. However, at just $30,240, the median annual wage is third-lowest in the nation – and that’s if you can find a job. The unemployment rate in West Virginia is tied for second-highest of any state. Finally, the incident rate for workplace-related illnesses and injuries is among the 10 worst.
4. Maine
Workplace safety is the issue that stands out most about Maine, as the rate of work-related health incidents is the highest in the nation. If the work environment doesn’t make you ill, the state tax rate might, as Maine places the fourth heaviest burden on average earners of any state. Throw in an above-average cost of living, and it adds up to a challenging place to make a living.
5. California
If you are considering job offers in various parts of the country, keep in mind that wage levels from place to place are not always an apples-to-apples comparison. California is a good example. It has one of the top 10 median wages in the country, which looks good on paper until you find out that its cost of living is the third-highest of any state. This is enough to more than negate the purchasing power of that relatively high wage level. Also, getting a job in the first place can be an issue, as the unemployment rate in California is higher than that of most states.
6. Vermont
This is another state in the high-cost-of-living camp, and workplace safety is another drawback. Vermont ranks second only to Maine in terms of the highest rates of work-related illnesses and injuries.
7. New York
A top-10 median wage level looks good at first, until you find out that the cost of living in the state is second only to Hawaii’s. Beyond that, the high tax burden will further erode the purchasing power of the money you earn.
8. Montana
There is a world of difference between Montana and New York, and in terms of making a living, they present very different challenges. The cost of living in Montana is about average, but the median wage is well below par. Workplace safety is also an issue, as Montana ranks fourth-worst in this category.
9. South Carolina
This ranks as one of the 10 worst places to make a living because it does poorly in terms of median wage, tax burden and unemployment.
10. Rhode Island
This state suffers from the high cost of living typical of New England, and also has a higher-than average unemployment rate.
As you can see, the profiles of what makes things difficult in these states vary, so deciding which set of problems matters most depends a great deal of your circumstances.
Generally speaking though, if you live in one of these states and are finding it hard to get your career going, you owe it to yourself to look elsewhere.
Methodology
Here are the five factors we evaluated and the data sources we used:
- Median wages. Median annual wage data is from the U.S. Bureau of Labor Statistics.
- State tax rates. MoneyRates analyzed the state tax information collected by the research group Tax Foundation.
- Cost of living. Data was gathered from the Council for Community and Economic Research’s Cost of Living Index.
- The unemployment rate. Unemployment data was sourced from the BLS.
- Incidents of workplace illness, injuries and fatalities. Workplace safety data is from the BLS, which sourced data from employer reports to the U.S. Occupational Safety and Health Administration and the BLS Survey of Occupational Injuries and Illnesses.
Full Ranking of 50 States
Didn’t see your state in the Best or Worst States to Make a Living? Find your state in the full ranking of all 50 states below:
| Rank | State | Cost of Living Index | Median Income | State Tax on Median Income | Unemployment Rate | Incidents/100 Workers |
|---|---|---|---|---|---|---|
| 1 | Wyoming | 92.8 | $38,280 | $0.00 | 5.2 | 3.7 |
| 2 | Washington | 106.0 | $42,190 | $0.00 | 5.8 | 4.7 |
| 3 | Virginia | 94.5 | $38,180 | $1,937.85 | 4 | 3.0 |
| 4 | North Dakota | 101.2 | $38,170 | $426.64 | 3.1 | 3.6** |
| 5 | Texas | 92.6 | $34,550 | $0.00 | 4.3 | 2.6 |
| 6 | Ohio | 92.5 | $35,030 | $731.29 | 5.1 | 2.9 |
| 7 | Michigan | 91.2 | $35,400 | $1,504.50 | 4.8 | 3.7 |
| 8 | Colorado | 101.9 | $38,800 | $1,796.44 | 2.9 | 3.6** |
| 9 | Illinois | 96.5 | $37,320 | $1,399.50 | 6.5 | 3.2 |
| 10 | Minnesota | 101.5 | $38,870 | $2,312.28 | 3.7 | 3.7 |
| 11 | Kansas | 90.9 | $33,700 | $1,265.20 | 3.9 | 3.7 |
| 12 | Indiana | 88.0 | $32,910 | $1,086.03 | 5 | 4.0 |
| 13 | Nebraska | 92.3 | $33,840 | $1,465.48 | 3 | 3.6 |
| 14 | Utah | 92.4 | $33,990 | $1,699.50 | 3.5 | 3.3 |
| 15 | Delaware | 102.8 | $37,750 | $1,708.63 | 4.4 | 2.8 |
| 16 | Tennessee | 90.3 | $31,820 | $0.00 | 4.5 | 3.3 |
| 17 | Missouri | 91.5 | $33,380 | $1,777.80 | 4.2 | 3.3 |
| 18 | Iowa | 92.0 | $33,650 | $1,690.00 | 3.8 | 4.4 |
| 19 | Oklahoma | 89.7 | $32,430 | $1,433.00 | 4.4 | 3.6** |
| 20 | Georgia | 91.7 | $33,430 | $1,815.80 | 5.5 | 3.2 |
| 21 | Idaho | 88.2 | $31,860 | $2,106.99 | 3.8 | 3.6** |
| 22 | Arizona | 98.8 | $34,680 | $911.08 | 5.4 | 3.2 |
| 23 | Pennsylvania | 103.0 | $36,150 | $1,109.81 | 4.9 | 3.6 |
| 24 | Alaska | 133.5 | $46,420 | $0.00 | 6.6 | 3.0 |
| 25 | Wisconsin | 98.1 | $35,110 | $1,900.65 | 4.5 | 4.0 |
| 26 | Kentucky | 90.0 | $32,340 | $1,691.72 | 5.6 | 3.8 |
| 27 | Massachusetts | 130.4 | $45,580 | $2,324.58 | 4.4 | 3.3 |
| 28 | Louisiana | 93.4 | $31,980 | $1,029.20 | 6.1 | 2.3 |
| 29 | Maryland | 121.1 | $41,860 | $1,935.85 | 4.7 | 3.5 |
| 30 | Alabama | 90.2 | $31,550 | $1,537.50 | 6.2 | 3.0 |
| 31 | Mississippi | 83.5 | $29,000 | $1,300.00 | 6.3 | 3.6** |
| 32 | North Carolina | 95.8 | $33,100 | $1,903.25 | 5.5 | 2.9 |
| 33 | New Jersey | 125.6 | $41,320 | $790.43 | 4.4 | 3.3 |
| 34 | New Hampshire | 118.2 | $37,280 | $0.00 | 2.6 | 3.6** |
| 35 | Florida | 100.5 | $31,810 | $0.00 | 4.9 | 3.7** |
| 36 | Connecticut | 131.8 | $43,830 | $1,991.50 | 5.7 | 3.7 |
| 37 | Arkansas | 91.4 | $29,420 | $1,299.25 | 4 | 2.7 |
| 38 | Nevada | 106.5 | $33,700 | $0.00 | 5.8 | 4.1 |
| 39 | South Dakota | 102.5 | $30,780 | $0.00 | 2.5 | 3.6** |
| 40 | New Mexico | 100* | $32,320 | $1,304.18 | 6.2 | 3.6 |
| 41 | Rhode Island | 123.3 | $39,050 | $1,464.38 | 5.4 | 3.6** |
| 42 | South Carolina | 97.5 | $31,280 | $1,693.20 | 5.7 | 3.0 |
| 43 | Montana | 102.7 | $31,970 | $1,651.33 | 4.3 | 4.6 |
| 44 | New York | 135.6 | $41,600 | $2,346.40 | 4.8 | 3.1 |
| 45 | Vermont | 123.8 | $37,040 | $1,314.92 | 3.3 | 5.1 |
| 46 | California | 134.3 | $39,830 | $1,351.66 | 5.4 | 3.8 |
| 47 | Maine | 114.7 | $34,710 | $2,142.96 | 3.4 | 5.3 |
| 48 | West Virginia | 103.7 | $30,240 | $1,135.80 | 6.5 | 4.1 |
| 49 | Oregon | 129.5 | $37,080 | $3,102.20 | 4.5 | 4.0 |
| 50 | Hawaii | 168.6 | $38,750 | $2,482.85 | 3.1 | 3.8 |
** Data was not available for these states so the average of all other states was used
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Comment: Where does your state rank? Let us know in the comments!
Hi Diana,
This is the note included in the master spreadsheet of state data:
“** Data was not available for these states so the average of all other states was used.”
I’ll add this note on the published Best States page as well.
Let us know if you have any other questions.
