New Data Reveals Most of America’s Highest Earners Live in This State

Can you guess which states has the most high-income cities?

Washington, D.C., and California have the most high-income households in the country, a GOBankingRates analysis of the just-released American Community Survey from the U.S. Census Bureau found. California has the most high-income households and the biggest increase year-over-year of high-income households, while Washington, D.C., has the highest percentage of high-income households.

The American Community Survey is a comprehensive survey conducted annually covering a broad range of topics including financial, economic and housing. GOBankingRates zeroed in on the survey’s high-income household data. Several past GOBankingRates studies have found that the middle class is getting squeezed and wealth inequality is growing.

GOBankingRates determined which states have the most high-income households in absolute numbers and as a percentage of all households. For the study, high income was defined as households earning $125,000 or more a year.

Read on to find out which states are home to the most high-income households in the U.S.

States With the Most High-Income Households

California topped the list, adding over 250,000 households with incomes of $125,000 or more in just one year, for a total of 3 million households. Washington holds the highest percentage of high-income households, with over 31 percent earning $125,000 or more.

Here’s a breakdown of the top 10 states with the most high-income households. This scored ranking comes from a comprehensive analysis of each state’s percentage of households earning $125,000 or more against the absolute number of such high-income households.

StateMedian Household IncomeHouseholds earning $125,000 or more (%)2016-2017 YOY Change (%)Households earning $125,000 or more (#)2016-2017 YOY Change (#)
1. California$67,16923.9%26%3,082,922257,946
2. New Jersey$76,47528.4%17.3%908,96153,477
3. Maryland$78,91628.1%16.4%613,33033,538
4. Massachusetts$74,16727.1%24.2%700,90055,088
5. Washington, D.C.$77,64931.1%16.5%86,4855,135
6. Connecticut$73,78126.8%15.7%364,47619,110
7. New York$62,76522.1%22.2%1,611,577115,924
8. Virginia$68,76623.6%18.5%734,18244,313
9. Alaska$76,11424.3%14.6%61,4832,855
10. Hawaii$74,92324.6%29.5%112,26810,035
2017 American Community Survey. The absolute number of households carries half the weight of the percentage of households in the final ranking.

California is home to dozens of America’s wealthiest cities. Eight large cities — those with more than 50,000 residents — have median household incomes in excess of $125,000, according to Census data:

  • San Ramon: $161,870
  • Palo Alto: $153,802
  • Pleasanton: $152,123
  • Mountain View: $135,115
  • Sunnyvale: $134,234
  • Yorba Linda: $132,952
  • Milpitas: $127,984
  • Fremont: $127,235

Hawaii only has 38,127 households earning $200,000 or more. But out of a total of 455,502 households in the state, that’s equal to 8.4 percent of all households. Hawaii is tied for the largest increase in $200,000-earning households, rising by 34.2 percent from 2015 to 2017.

Connection Between High Incomes and Inequality

A notable pattern among these states is wealth inequality. Five of the states with the most high-income households also possess the highest levels of wealth inequality in the country: Washington, D.C.; New York; Connecticut; California; and Massachusetts, in that order.

The Gini index is a metric used to gauge wealth inequality, with a value of 1 equal to complete inequality, and zero equal to complete equality. According to the most recent Census data, the national Gini index is 0.4815, so anything higher than that has wealth inequality that’s worse than the national average.

Here’s a breakdown of these states’ Gini coefficients and the percentage of households with incomes of less than $25,000 vs. the percentage of households with incomes of $125,000 or more.

State Income Inequality Comparison
StateGini Index (bold = greater than U.S. average)Households Earning Less than $25,000Households earning $125,000 or more
1. California0.488918.7%23.9%
2. New Jersey0.480216.6%28.4%
3. Maryland0.452014.2%28.1%
4. Massachusetts0.483118.3%27.1%
5. Washington, D.C.0.531421%31.1%
6. Connecticut0.495016.6%26.8%
7. New York0.512921.5%22.1%
8. Virginia0.466617%23.6%
9. Alaska0.418013.6%24.3%
10. Hawaii0.440415.3%24.6%

2017 U.S. Gini Index = 0.4815

States with higher Gini coefficients than the U.S. average tend to have very high rates of low-income households — many are close to a fifth of all households.

Find out more about how wealth inequality is making it harder than ever to live comfortably in America.

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