While inflation took a bite out of most Americans’ earnings last year, median household incomes managed to eke out small gains in 16 states and Washington D.C., according to new data from the U.S. Census Bureau.
Nationwide, the median U.S. household income dipped 2.3% to $74,580 in 2022, down from $76,330 in 2021, as prices for everyday essentials like food, gas and housing spiked. But residents in nearly a third of states bucked the downward national trend to see incomes rise.
Delaware saw the biggest jump both in percentage terms and dollar amount. The median household income there grew 8.3% to $80,750, up $6,680 from $74,070 in 2021. North Dakota and Missouri rounded out the top three states in percentage growth at 5.6% and 4.1%, respectively.
In North Dakota, the median income rose to $78,720, a $4,440 increase. Missouri’s median inched up to $71,520, a $2,950 bump. Two states, Nevada and Minnesota, tied for fourth with 4.1% growth.
While nationwide incomes dropped on average, some states with booming economies saw larger increases that helped offset higher living costs. Many of the states with rising incomes have thriving energy, technology or financial sectors. Others have seen an influx of new residents with higher paying jobs relocate from pricier parts of the country.
“Areas like Texas and Nevada have experienced rapid population growth over the past decade, which has boosted economic activity and likely helped lift wages,” said Adam Kamins, senior regional economist at Moody’s Analytics. “Meanwhile, places like North Dakota and Montana have benefited from the surge in domestic energy production in recent years.”
Washington D.C. saw its median household income rise 3.9% to over $100,000, topping all state medians. Maryland and Connecticut also saw sizable gains in high-income households. Economists say a concentration of knowledge-economy jobs in fields like tech, finance and healthcare is driving wealth creation in those areas.
At the other end of the spectrum, West Virginia’s median rose just 3.7% to $52,460 – the only state where the median remained below $60,000. For lower-income states like West Virginia, even small dollar increases can lift families above the poverty line and represent significant progress.
Nationally, economists warn the income declines seen last year could be the start of a prolonged slump as the economy teeters on the brink of recession. Persistently high inflation and rising interest rates threaten to dampen consumer spending power and business profits, which may result in layoffs or hiring freezes.
While incomes managed to grow in a handful of states in 2022, preliminary data already shows declines emerging in many areas this year. Maryland, Texas, Hawaii and others have reported drops in 2023 as economic headwinds pick up.
“Looking ahead, we expect household incomes will likely decline nationally in 2023 as the economy continues to slow,” Kamins said. “Areas heavily tied to interest-rate sensitive sectors like housing and finance may fare even worse.”
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Where Median Household Incomes Increased in 2022:
- Delaware
- 2022 median income: $80,750 (+8.3% vs. 2021)
- Dollar amount increase: $6,680
- North Dakota
- 2022 median income: $78,720 (+5.6%)
- Dollar amount increase: $4,440
- Missouri
- 2022 median income: $71,520 (+4.1%)
- Dollar amount increase: $2,950
- Nevada
- 2022 median income: $72,330 (+4.1%)
- Dollar amount increase: $2,950
- Minnesota
- 2022 median income: $90,390 (+4.0%)
- Dollar amount increase: $3,650
- Montana
- 2022 median income: $72,980 (+4.0%)
- Dollar amount increase: $2,890
- Washington D.C.
- 2022 median income: $101,700 (+3.9%)
- Dollar amount increase: $3,960
- Connecticut
- 2022 median income: $90,730 (+3.8%)
- Dollar amount increase: $3,430
- West Virginia
- 2022 median income: $52,460 (+3.7%)
- Dollar amount increase: $1,960
- Maryland
- 2022 median income: $108,200 (+3.0%)
- Dollar amount increase: $3,200
- Texas
- 2022 median income: $74,640 (+2.6%)
- Dollar amount increase: $1,960
- Hawaii
- 2022 median income: $91,010 (+2.6%)
- Dollar amount increase: $2,380
- Alaska
- 2022 median income: $89,740 (+2.5%)
- Dollar amount increase: $2,250
- Georgia
- 2022 median income: $67,730 (+2.1%)
- Dollar amount increase: $1,420
- Florida
- 2022 median income: $65,370 (+1.5%)
- Dollar amount increase: $960
- Utah
- 2022 median income: $95,800 (+1.3%)
- Dollar amount increase: $1,290
- Massachusetts
- 2022 median income: $93,550 (+0.2%)
- Dollar amount increase: $210