While several methods exist to determine which U.S. states are the poorest as of 2019, looking at median household income, poverty rate, and unemployment rate offers a simple and straightforward way to compare how much a typical family in one state earns versus a typical family in another state. Based on these metrics, the poorest states in America are West Virginia, Mississippi, and Arkansas.

Key Takeaways

  • Measuring the poorest U.S. states as of 2019 includes analyzing the median household income, poverty rate, and unemployment rate.
  • The poorest states in America were West Virginia, Mississippi, and Arkansas.
  • More than 38 million people in the U.S. are in poverty or 11.8% of the population with the south being the poorest region.

The Gap Between the Rich and Poor

Income inequality continues to be a hot topic in 2019. Politicians and activists have brought to the forefront of the national conversation the fact that the gap in earnings between the richest Americans and those at the bottom of the economic ladder is greater than at any time since the 1920s and 1930s. While the most affluent citizens continue to amass extravagant fortunes, build opulent mansions, and live lifestyles of luxury, poor people struggle more each year, their wages rising more slowly than the inflation rate, which means that, in many cases, their paychecks have less purchasing power now than five or ten years ago.

Cost of Living

It should be noted that a positive correlation exists between states' affluence and their cost of living. For example, the median family in Maryland earns almost twice what the median family in Mississippi earns, but each dollar goes further in Mississippi. Much of the wealth in Maryland comes from the Washington, D.C. to Baltimore corridor, where everything from real estate to gas prices runs higher than the national average. By contrast, Mississippi offers some of the nation's lowest living costs.

Poverty

More than 38 million people in the U.S. are in poverty or 11.8% of the population. Although the poverty rate has come down in recent years, the country has only recently fallen below the 2008 pre-recession levels.

Income and Poverty in the U.S. 2018 U.S. Census Bureau
Poverty Rate 2018 U.S. Census Bureau.  Investopedia

Although the income threshold for measuring poverty can vary depending on the size of the family, a household with four family members would be below the poverty level if they earned less than $25,465 per year.

Despite its low cost of living, the south was the poorest region in the U.S. in 2018. Below are the 2018 poverty rates by region:

  • South 13.6%
  • Northeast was 10.3%
  • Midwest 10.4%
  • West 11.2%

Only the south recorded a slight increase in poverty from 2017 to 2018 while the other regions recorded declines.

Education

Glaring discrepancies in income are seen at the state level as well as the individual level. Common threads exist between the richest states and between the poorest states. Wealthy states, such as Maryland, Connecticut and New Jersey, tend to have high educational attainment among citizens and are located in close proximity to major economic hubs, such as New York City and Boston. Poorer states almost invariably have a less-educated populace and offer less in the way of economic opportunity. None of the 50 largest U.S. metropolitan statistical areas (MSAs), where high-paying jobs are often found, are located in Mississippi, West Virginia or Arkansas.

America's Poorest States in 2019

Below are the three poorest states in the U.S. as reported in 2019 by the U.S. Census Bureau. Please note the data is from 2018, except for the unemployment rates, which are from 2019.

West Virginia

As of 2018, the median household in West Virginia earned $44,097, compared to a national median of just under $61,937. The state's 2019 unemployment rate was 5.0%, which ranked as 48th in the country and was much higher than the national rate of 3.8%.

In addition to the lowest median household income, West Virginia had the 4th highest poverty rate in 2018 at 16.5%. Please note that the Census reports the two-year average of the poverty rates from 2017 and 2018. West Virginia's poverty level was nearly five percentage points higher than the nationwide poverty rate of 11.8%. In other words, more than 16% of the population–with four family members–earned less than $25,465 per year.

Mississippi

As of 2018, the median household in Mississippi earned $44,717, which was slightly higher than West Virginia but well below the national median of $61,937. Mississippi's unemployment rate was 5.7% in 2019–nearly 2% higher than the national average. Mississippi had the nation's second-highest poverty rate in 2018 at 19% when using the two-year average from 2017 and 2018.

The state's poverty rate was nearly six percentage points higher than the 11.8% national average. Nearly one-out-of-five households–with four family members–earned less than $25,465 per year. Mississippi has low educational attainment whereby approximately 20% of the state's residents hold bachelor's degrees, compared to more than 30% nationwide.

Arkansas

As of 2018, the median household in Arkansas earned $47,062, which was nearly $15,000 less than the median income throughout the U.S.

The state's unemployment rate was low in 2019, coming in at 3.6%, which ranks as 30th in the country and is only slightly higher than the national rate of 3.8%. However, Arkansas had the poverty sixth highest poverty rate in 2018 of 15.4% versus the nationwide poverty rate of 11.8%.