Here are states where people have the highest income, and California is not in the top 10
FILE-In this photo illustration, $100 dollar bills are on display. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
OAKLAND, Calif. - A new analysis took a look at annual incomes from state to state and found salary inequities vary widely depending on the region, with California showing an astounding $459K gap between the average annual income of the state’s top 5% of earners and the bottom 20%.
And perhaps surprising to many, California did not crack the top ten in state rankings where people have the highest income, according to the research by personal finance company WalletHub.
Researchers conducted their analysis by looking at three key metrics in all 50 states and the District of Columbia: the average annual income of the top 5%, the average income of the bottom 20%, and the median income for all residents.
The average incomes were adjusted for the cost of living index.
Based on those factors, California ranked 12th on the list.
By the numbers:
The Golden State’s average annual income of the top 5% was $473,848.
For earners at the bottom 20%, the average was $14,542.
The median income for all residents stood at $129,884.
In the U.S., the median annual income was about $81,000, based on the latest data from the U.S. Census Bureau.
What they're saying:
"The highest-earning 10% of individuals in the United States earn over 12 times more than those in the lowest-earning 10%, based on the latest Census data," WalletHub analyst Chip Lupo said in a news release.
WalletHub's experts also noted that income differences are largely driven by differences in cost of living.
"After correcting for cost of living, high incomes in San Francisco do not look as rosy compared to lower incomes in the Midwest," said University Professor Emeritus of Economics at Iowa State University Peter Orazem.
"Rural area wages average about 20% lower than metro area wages, also reflecting differences in housing costs," Orazem added.
States where people had the highest income were:
- Virginia
- New Jersey
- New York
- Connecticut
- Washington
- Utah
- Minnesota
- Colorado
- Illinois
- Massachusetts
- Texas
- California
- Washington, D.C.
- Georgia
- Maryland
(Source: WalletHub)
It should be noted that rankings based on only the median income in each state put California near the top, in fourth place, after Washington, D.C., Hawaii, and Massachusetts, respectively.
SEE ALSO: In all Bay Area counties, earning six-figures can still be considered 'low income'
Researchers said that the findings demonstrate that income inequality remains a pressing issue in the country.
"By measuring the income of various percentiles against a state's median income, we can better identify where income disparities are more prevalent, which could help us better understand why residents of certain states struggle more to make ends meet," Lupo explained.
WalletHub used recent data from the Census Bureau and the Council for Community and Economic Research to create its rankings.
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