10 States With the Lowest Middle-Class Population

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In examining the financial landscape of the United States, it’s crucial to understand where the middle class–a segment often considered the backbone of the American economy–stands in terms of its size across different states.

Learn: 7 Ways the Upper Middle Class Can Become Rich in 2024

By analyzing data on average and median household incomes, cost of living, and the number of households in each state, we can identify which states have the smallest proportion of middle-class families. For the purposes of this analysis, the middle class is defined as households earning between two-thirds to double the median household income for their state.

Methodology

The calculation considers the median household income as a baseline to identify the middle class’s income range. It also factors in the cost of living to adjust these figures, providing a more accurate representation of the middle-class population’s size in real terms. The number of households in each state offers a framework for estimating the proportion of middle-class families.

States With the Lowest Middle-Class Population

Based on the criteria mentioned, here are the ten states with the lowest proportion of middle-class families, considering both the income distribution and cost of living adjustments:

1. California: With a high cost of living, especially in housing, California’s middle class is under pressure. Despite having the largest number of households, the gap between the median income and living costs significantly reduces the middle-class proportion.
2. New York: Similar to California, New York’s high cost of living, particularly in urban areas like New York City, challenges middle-class families. The substantial difference between median income and living expenses narrows the middle-class segment.
3. Hawaii: As the most expensive state, Hawaii’s extremely high cost of living across all categories, especially housing, makes it difficult for middle-class families to thrive, despite relatively high median incomes.
4. Alaska: Despite a higher median income, Alaska’s cost of living is significantly above the national average. The remote location and high utility costs contribute to a smaller middle-class population.
5. Massachusetts: High housing costs and an overall cost of living significantly above the national average challenge the middle-class population’s growth in Massachusetts.
6. Oregon: With a cost of living that’s 21.2% higher than the national average, Oregon’s middle class faces difficulties, especially with housing and transportation costs.
7. Washington: The high cost of living, particularly in housing and healthcare, limits the size of the middle class in Washington state.
8. New Jersey: Despite a high median income, New Jersey’s cost of living, especially housing costs, puts a strain on the middle-class population.
9. Colorado: Colorado’s middle class is squeezed by housing costs 20% above average and a general cost of living that’s 4.6% above the national average.
10. Vermont: High housing and utility costs contribute to Vermont’s small middle-class population, with a cost of living 15.9% above the national average.

Conclusion

The states listed above exhibit a challenging environment for middle-class families, primarily due to the high cost of living in comparison to median household incomes. This analysis highlights the need for policies and initiatives that support the middle class, especially in states where the cost of living significantly outpaces incomes. Ensuring the growth and stability of the middle class is essential for the overall health and prosperity of the American economy.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.

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