Employment Trends

The Best and Worst States to Make a Living

Written by Peter Jones

We’ve all heard about the American Dream, right? It’s a lovely concept that has driven millions of people to set up their lives and careers all over the country. It speaks to the hard work that people do every day, hustling to maintain the best life possible for themselves and their families. The only trouble with “the American Dream” as a notion is that the U.S. is made up of 50 distinct entities, each with its own government, culture, and set of challenges. So career opportunities are not always created equally. Some states are definitely more hospitable to career growth and maintenance than others.

Every year, the personal finance and investing site MoneyRates publishes the results of their research on the best and worst states to make a living. This is not to say that the “worst” states should be shunned, or that you should pack your bags immediately and move to the “best” ones. But MoneyRates has evaluated five of the most crucial, career-impacting factors to help you make an informed decision about where you want to be:

  • Cost of Living
  • Workplace safety
  • State tax burdens
  • Median wages
  • Unemployment rates

These ratings are designed to help you decide where you should be, depending on your job priorities and goals.

The 10 Best

First, the good news…let’s look at the top-rated states for making a living for 2017.

1. Washington

Washington sits at the top of the poll after knocking out six-time champ Wyoming (now #6). Although it has a fairly high cost of living (about 7% higher than other states), other factors helped elevate it above the crowd this year, like high median wages, and solid employment rates and workplace safety. Washington also does not have a tax on wages, which makes it appealing as well.

2. Minnesota

If you can handle cold winters, Minnesota is a good choice for people seeking work. Its high median wages (it’s in the top ten), low unemployment rate, and low number of workplace safety issues make it a welcoming place to start your career, or make the jump to a new level. MoneyRates notes that Minnesota’s state tax is the fifth-highest in the country, however, so those high wages do come with a catch.

3. Illinois

Illinois is a good all-around candidate, scoring above the median in cost of living, state tax burdens, workplace safety, and median wages. The fly in the ointment: its unemployment rate of 4.9%.

4. Texas

Don’t mess with it. Texas consistently ranks highly in this study year over year, including a #1 finish in 2015. Texas’s shining metrics are its low cost of living (significantly lower than the national average) and the fact that workers do not pay state income tax on their wages. These benefits come with a caveat, though: Texas’s unemployment rate is the tenth highest in the U.S., so that is definitely something to consider if you’re looking to change jobs without having one in the works already.

5. Colorado

Although it’s home to some of the best skiing in the country, Colorado offers more to potential employees than its outdoorsy mountain charm. Colorado earns its place on the list by having the lowest unemployment rate in the country, 2.6%. The state ranked 11th on the list of states with the highest median wages, and if you’re a fan of the movie This is Spinal Tap, that is basically the same as finishing in the top ten. Colorado’s low unemployment and high wages are balanced out somewhat by its higher cost of living and taxes paid by workers.

6. Wyoming

The previous “best in show” from 2016, Wyoming is still a contender—however, it lost some of its standing by an uptick in workplace safety incidents after the list was expanded to include both fatal and non-fatal incidents. Given that Wyoming’s top industries include mining, manufacturing, and logistics, this fact may be dismaying, but not entirely surprising. If you are in a lower-risk industry, then Wyoming can be a great place to make a living, with a strong median wage, no state income tax, and a low cost of living.

7. Virginia

Virginia is for lovers, as the tourism slogan goes, but it turns out it’s also for workers. Like many of the top ten, Virginia is a state that gets consistently high marks year after year. It’s a large state with diverse industries, and has above-average wage and unemployment rates. The state tax burden is high (perhaps keeping it from the upper echelons of the top ten), but it has a top 5 workplace safety ranking.

8. Ohio

The factors that sealed Ohio’s place in the top ten are two big ones: low cost of living and low state income tax burden. This means that although the state is about average when it comes to wages, that money can go farther than it might in other states. As with Texas, however, the unemployment rate may give you pause: at 5.1%, it’s the fifth-worst unemployment rate in the country.

9. Michigan

If you love college football, then Michigan just might be the place for you. While there, you would also enjoy a reasonable cost of living, strong median wage, and safe workplace. However, its state income tax is higher than other states, which keeps it from being at the top.

10. Kansas

There’s no place like home, right? If you’re thinking of clicking your heels and heading to Kansas, you’d be selecting a highly affordable state with a very low unemployment rate of 3.8% (lower than the national average). Kansas’s best feature is its cost of living, which is the eighth best of any state.

The 10 Worst

Now the less-good news. These are the ten states deemed to be the worst for making a living.

1. Hawaii

It turns out that living in tropical paradise doesn’t come cheap. Hawaii features a high median wage (the tenth-highest of all states) and a low overall unemployment rate, but also has a very high cost of living and a very high state income tax burden. Hawaii has the dubious distinction of being the worst state for making a living for the past seven years.

2. California

If you’ve been humming “California, Here I Come” and thinking about making a permanent scenery change to the West Coast, the state’s performance on the survey may cause you to put a pin in it. California’s high cost of living is Hawaii-esque, and workers in the state pay high income taxes.

3. Montana

Known for its rugged terrain and independent spirit, working in Montana can be risky. The state is the third worst state in the ranking of workplace safety, thanks to injuries and workplace fatalities. The state also has a low median salary, placing in the bottom ten among all states.

4. West Virginia

Like Montana, West Virginia earned its spot near the bottom with risky working conditions and low wages. The cost of living is relatively low, but this is not supported by other factors as it is in the states ranked higher on the list.

5. Vermont

Although it has a low unemployment rate (it’s among the top ten in the country in that regard), Vermont also has a very high cost of living (it’s among the bottom ten in the country in that regard).

6. Oregon

Known for its Pacific Northwest charm (and, more recently, its hipster cred thanks to Portlandia), Oregon unfortunately also has a high cost of living. It’s also the dubious winner of the “highest state tax burden” prize, ranking dead last of all the states.

7. South Carolina

Southern charm aside, South Carolina ranks low in almost all of the metrics measured by MoneyRates: median wages, state income tax burden, and workplace safety, specifically.

8. Maine

While Maine has many coastal charms (and the best lobster rolls you’re likely to find anywhere), its cost of living and state income tax burdens are among the higher ones on the list.

9. New York

Frank Sinatra might disagree about the inhospitability of his beloved home city, but as a state New York’s high cost of living (particularly in the metro areas) and very high state income taxes counteract its high median wages.

10. Mississippi

Mississippi’s affordable cost of living is unfortunately counteracted by its low median wage and dismal workplace safety ratings.

Again, whether you want to move somewhere might be based on factors outside of the ones evaluated here. Your career is about what works best for you, but the best asset you have is information, so it’s in your best interest to take metrics like these into account when you’re making major life and relocation decisions.

About the author

Peter Jones