Worst States to Make A Living 2012

Incomes, unemployment, cost of living and taxes have created extra career challenges in these states. See if you live in one of MoneyRates.com's worst states to make a living.
By Richard Barrington

You probably know that there are plenty of challenges to making a living in today's economy. What you may not know is how significantly the place you live can impact some of those challenges.

According to the Bureau of Labor Statistics, average wages range from a low of $33,930 in Mississippi to a high of $53,700 in Massachusetts. Unemployment rates range from a low of 3.3 percent in North Dakota, to a high of 12.6 percent in Nevada. Tax rates and cost of living also vary greatly by state. So are some states really better for making a living than others?

For the second year in a row, MoneyRates.com has calculated a list of the best and worst states to make a living. The process factors in each state's average income, state tax rate, cost of living and unemployment rate to create an adjusted average income figure that serves as the basis for these rankings.

In a separate article, you can find the 10 best states to make a living in 2012. Here, though, are MoneyRates.com's 10 worst states to make a living for 2012:

Hawaii1. Hawaii (Adjusted average income: $22,394)

 There are plenty of lifestyle perks to living in a warm climate with beautiful scenery, but financially it can be tough going. Hawaii repeats from last year as the toughest place to make a living, and it isn't even close to losing the spot. At $22,394, Hawaii's adjusted average income figure is more than $7,000 below that of the next lowest state. The primary problem is that while incomes in Hawaii are about the national average, the cost of living in the state is far and away the highest in the nation.



Maine2. Maine ($29,703)

 Another repeater in its position from last year, Maine suffers from a combination of below-average incomes with above-average cost of living. It also doesn't help that it has one of the highest state tax rates.




Vermont3. Vermont ($30,433)

 This state slipped a bit, from fifth-worst last year, despite improving its adjusted average income figure. The problem is, some of the states around it in the rankings improved their performance even more significantly.




Mississippi4. Mississippi ($31,178)

 Another state that fell in the rankings despite a slight improvement in its adjusted average income figure, Mississippi dropped four places this year. As noted above, Mississippi has the lowest average income in the country, and also has one of the highest unemployment rates.



Montana5. Montana ($31,256)

 Fifth-worst is nothing to be happy about, but Montana did climb a couple spots from last year. The key problem remains that it has one of the lowest average income levels in the U.S.





Rhode Island6. Rhode Island ($31,353)

 Not all New England states fared badly -- Massachusetts actually made the list of 10 best states to make a living for the second year in a row -- but Rhode Island joins Maine and Vermont on the worst list. High levels of unemployment and cost of living are the chief problems here.



California7. California ($31,459)

 Despite climbing three slots from last year's ranking, California remains on this list due to a combination of high taxes, high cost of living and high unemployment.





West Virginia8. West Virginia ($32,297)

 The primary reason West Virginia is on this list for the second year in a row is one of the lowest average income levels in the nation.




South Carolina9. South Carolina ($32,645)

 South Carolina makes the list for the second year because of a combination of low income and high unemployment.





South Dakota10. South Dakota ($33,121)

 Despite having no state income tax, South Dakota makes this list because its average income is higher only than Mississippi's among the 50 states.

South Dakota is the only newcomer to this year's list of the 10 worst states for making a living, while Oregon was the only state to escape the list since last year, rising to the 13th worst state to make a living in 2012.


A note on the differences

The goal of this list is not to shame the states where times are tough. Instead, the inspiration for this analysis grew out of the observation that as difficult as the economy has been in recent years, there are significant differences in conditions among the 50 states. If you've ever wondered whether things might be easier somewhere else, this list might give you the answer.

If you didn't see your state in the best or worst articles, please see the full 50-state list to find its ranking.

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Stephen Larsen 1 November 2012 at 4:42 pm

As a Mainer who has struggled to survive economically these past 35 years, I can only add that the rating may be true, but that is not why I continue to live in this wonderful State and my daughter has returned from college to continue living here instead of the more favorable economic states. Maine is often rated as a top place to raise a family due to its clean environment, good schools, etc.. I only wish we could use these favorable conditions to lure more jobs to the State. As for taxes, my biggest burden are local property taxes, not State income taxes or sales taxes, the most regressive tax we all face no matter what State we live in.

Ed 3 June 2012 at 6:59 am

Why am I not surprise to see California, lol. As much as I love that state I would have to agree that it is a tough state to live in. I lived in Southern California and I hated the heat and traffic down there. Up north is a little at ease. The employment is bad out there. I hate to say this about myself but I worked for at least 10-11 different companies since I lived there and when I lost my last job in 2010 I thought I would get another well-paid job after I collect unemployment for a week or two nope a year went by I applied everyday every week I got records to prove I looked for work. With the high cost of living people would move out to cheaper areas but guess what happen then that area cost of living goes up as well. So when more people move in of course everything goes up but then it makes it harder to find a job because now you got more people applying for the same job. I lived in California most my life and I regret coming back when I lived in Georgia. Now I live in Michigan only thing that sucks so far is the whacky weather and high auto insurance.

Mathew Brown 3 April 2012 at 8:10 pm

You can go to all the "motivational seminars" and make all the contacts you want, those are the facts, that Maine people are underpaid and the goods (including housing and utilities) are overpriced. On top of that, just like the article said, the taxes here are ridiculous and the working class continues to support the non working class. Maine Career Center does nothing for anyone with a bachelors degree or more. Businesses stay away because of the taxes and high workers comp rates. Can't argue the facts.

ImListening 2 April 2012 at 5:29 pm

These are stats that make it very difficult to be proud of where you live. I don't feel much like telling people Maine, "Life the way it should be". Because the unemployment, low pay and high taxes really does su ck.

Stephen R. Simons 25 March 2012 at 4:48 pm

The Maine Career Center on Lancaster Street provides motivational seminars, help, suggestions for contacts and connections that can change this dismal appraisal. I particularly recommend workshops led by Cindy Edwards for people to overcome discouragement and to move forwardd infinding personal success in Maine.