Although the U.S. is not the largest country in the world (either by landmass or population), it is the world's largest economy by gross domestic product (GDP), a position it has maintained since 1871. GDP measures the total value of goods and services a state or country produces over a given time period. After the second quarter of 2020, according to the U.S. Bureau of Economic Analysis (BEA), the top five states by real gross domestic product (GDP) in the United States were California, Texas, New York, Florida, and Illinois.
However, GDP per capita by state is a different story. Dividing GDP by the state's population, five different states and districts emerge: District of Columbia, New York, Massachusetts, Alaska, and Washington. GDP powerhouse California, while contributing 14.8% to the U.S.' overall GDP in the second quarter of 2020, ranked sixth in highest state GDP per capita, due to its large population. Let's take a closer look at the top five states with the highest GDP per capita, based on the latest 2019 data from the BEA and the U.S. Census Bureau.
|GDP per Capita by State|
|State/Area||Population (2019)||GDP (by state, millions)||GDP (per capita)|
|District of Columbia||705,749||123,929.3||$175,599.68|
District of Columbia
At the top of the list, the District of Columbia and the capital of the United States had a whopping GDP per capita of $175,599.68 in 2019, which is more than double the country's median income of $68,703 that year. What's the deal?
Though the city is densely populated with 705,749 residents, D.C. itself only occupies 68.34 square miles of land. Still, Washington is diversified, with an increasing percentage of professional and business service jobs. Approximately 15% of federal government employees work in Washington, D.C., not to mention all the workers for international and foreign non-governmental organizations or embassies.
In addition, Amazon announced in 2018 that it would build its second headquarters nearby in DC, right across the river in Arlington, Virginia. The move follows after many technology companies that wish to foster warmer relationships with the U.S. government as it relates to security, surveillance, or lobbying have also set up hubs in the nation's capital. After government employment, tourism is D.C.'s second-largest industry bringing in millions of visitors every year.
The state of New York, where just short of 6% of Americans live, had a GDP per capita of $76,627 in 2019. The financial services sector is the most important area of the state. Professional and business services such as legal advice, administrative services, and management consulting have produced an output worth more than $175 billion.
In addition to Wall Street, New York is steadily growing its technology and entrepreneurship presence. New York's GDP greatly suffered as a result of the financial crisis of 2008-2009, as its financial services sector declined, but it has subsequently rebounded.
New York's GDP per capita in 2019.
Massachusetts takes third place in terms of real GDP per capita of $75,438.72 in 2019. Education and health services offer the most job opportunities in Massachusetts, though this is not a surprise: Boston is home to 35 universities, including Harvard University, MIT, and Boston University among multiple others.
In addition, manufacturing makes up about 9.5% of the state's GDP and 282,582 jobs in computer and electronic product manufacturing, chemical manufacturing, and food processing.
Alaska had a real GDP per capita of $72,798.26 due to its small population, which was less than 1 million people, and its high production output of oil and gas. A large majority of Alaska's current-dollar GDP comes from petroleum, natural gas, coal, gold, zinc, and other precious metals. Other prominent export goods from Alaska include seafood products, such as salmon and cod. Employment in Alaska is concentrated in the government sector and the energy industry.
Because of the oil and natural gas discovery and subsequent energy boom in the 1980s, Alaska built the Trans-Alaska Pipeline System. The Alaskan state legislature created the Permanent Fund, which must set aside a certain portion of oil revenues and invest it for the future of Alaskan residents. Every year, the Permanent Fund pays an annual dividend to all eligible residents who lived in Alaska for the full calendar year and intended to stay in Alaska indefinitely.
According to BEA, retail trade was the leading contributor to the increase in real GDP in Washington, the fastest-growing state in the fourth quarter of 2019. The state housing Fortune 500 companies including Microsoft, Starbucks, and Boeing (as well as the home of billionaires Jeff Bezos and Bill Gates) is quickly crawling up the list. Washington's GDP per capita in 2019 came in just a hair below Alaska's at $72,054.42.
Washington also boasts the largest concentration of science, technology, engineering, and math workers in the entire United States. Trade, transportation and utilities; government; and education and health services make up the largest sectors in Washington.
Bureau of Economic Analysis. "Gross Domestic Product by State, 2nd Quarter 2020." Accessed Nov. 29, 2020.
United States Census Bureau. "2019 National and State Population Estimates." Accessed Nov. 29, 2020.
Brookings. "Public service and the federal government." Accessed Nov. 29, 2020.
U.S. Bureau of Labor Statistics. "Massachusetts." Accessed Nov. 29, 2020.
U.S. Department of Energy. "Massachusetts Industrial Resource Fact Sheet." Accessed Nov. 29, 2020.
Bureau of Economic Analysis. "Gross Domestic Product by State: 4th Quarter and Annual 2019." Accessed Nov. 29, 2020.
U.S. Bureau of Labor Statistics. "Washington." Accessed Nov. 29, 2020.