Where to find the fattest paychecks

Census Bureau reports that Maryland had the highest median income level in 2008, at $70,545, while Mississippi ranked very last with $37,790.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Les Christie, CNNMoney.com staff writer

Gasoline prices and taxes by state
See where household income is the highest. More
10 Fastest growers
Where median income increased most in 2008.
Rank State 2007 Median income 2008 Median income Change
1 LA 40,926 43,733 6.9%
2 DC 54,317 57,936 6.7%
3 AK 64,333 68,460 6.4%
4 HI 63,746 67,214 6.3%
5 DE 54,610 57,989 6.2%
6 SD 43,424 46,032 6.0%
7 KS 47,451 50,177 5.7%
8 NE 47,085 49,693 5.5%
9 AL 40,554 42,666 5.2%
10 NJ 67,035 70,378 5.0%
Source:U.S. Census Bureau
10 Slowest growers
Where median income increased least in 2008.
Rank State 2007 Median income 2008 Median income Change
1 FL 47,804 47,778 -0.01%
2 MT 43,531 43,654 0.3%
3 MI 48,450 48,591 0.3%
4 IN 47,448 47,966 1.1%
5 ME 45,888 46,581 1.5%
6 AR 38,134 38,815 1.8%
7 CA 59,948 61,021 1.8%
8 OR 49,136 50,169 2.1%
9 AZ 49,889 50,958 2.1%
10 NH 62,369 63,731 2.2%
Source:U.S. Census Bureau

NEW YORK (CNNMoney.com) -- Maryland is the nation's top-earning state for the third year in a row, with a median household income of $70,545 in 2008, according to a U.S. Census Bureau report released Monday.

The states with highest median incomes are concentrated in the far West and in the Northeast, around the District of Columbia.

Most of the lowest-earning states are in the South. Mississippi had the lowest median income of just $37,790, while West Virginia ($37,989), Arkansas ($38,815), Kentucky ($41,538), and Alabama ($42,538), round out the bottom five

The four highest earning states after Maryland, are New Jersey, which has a median household income of $70,378, Connecticut ($68,595), Alaska ($68,460) and Hawaii ($67,214).

Real earning power

But if you're thinking of moving to Maryland in search of big bucks think twice. While Maryland's median income is nearly twice that of Mississippi, the locals there aren't necessarily walking around with twice as much money in their pockets, because of the difference in the cost of living in each region.

"It's very important to compare cost of living," said Erol Yildirim, chief economist for the Council for Community and Economic Research. "Purchasing power is very different for different areas."

And the cost of living in Bethesda, Md., is about 52% higher than it is in Tupelo, Miss., according to Yildirim. A dozen eggs costs $1.93 in Bethesda, compared with $1.50 in Tupelo, while a loaf of bread is $1.66 compared with $1.37.

And there is a huge difference in housing costs. The average apartment rental in Bethesda is $1,464 a month versus just $512 in Tupelo. And the median home price in Bethesda is $529,707 compared with just $220,000 in Tupelo.

Taking these living expenses into account wipes out much of the advantage of Maryland's higher income. Once purchasing power is taken into account, Southern and Midwestern states become much better bargains.

Change in pay

Florida was the only state where median income actually declined, falling 0.01% before adjusting for inflation. Michigan and Montana barely inched up, by about 0.3% in each case. Income in Indiana (1.1%) and Maine (1.5%) also increased very modestly. But with inflation at over 3%, those states were effectively in negative territory.

Louisiana saw the biggest jump in income, up 6.9%. But that may be the result of all the Federal dollars flowing into the area to rebuild it after Katrina. The state's unemployment rate averaged less than 5% during 2008.

Another big winner was the District of Columbia, which saw median income rise 6.7% in a year when the White House changed hands. Alaska (6.4%), Hawaii (6.3%) and Delaware (6.2%) also recorded solid gains.

Brookings Institute demographer William Frey notes that the current economic downturn may have actually given these median income levels a boost. That's because when times get tough, many of the lowest-paying jobs disappear, artificially boosting income statistics.

And many of the workers who hold the lowest-paying jobs are immigrants, who are often highly mobile, and may elect to return home and opt out of the U.S. workforce altogether.

Frey notes that in 2008, the percentage of foreign-born U.S. residents fell to 12.5% from 12.6% in 2007, due mostly to a downturn in net immigration from Mexico, said Frey. "When many low income people leave," said Frey, "median income can go up."  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
The 13 most WTF gadgets From the weird to the gross, these 13 gadgets will make you wonder why they even exist. More
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More
America's most powerful cars A new 'horsepower war' has erupted among U.S. automakers and these are the most potent weapons in their arsenals. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.