America’s Wealth Gap Isn’t the Same Everywhere: Here’s How Your State Stacks Up

The economic divide in the U.S. is striking. In most states, the top 20% earners make about 23 times more than those in the bottom 20%, according to a new MoneyLion analysis.

The reality is that in most states, the bottom fifth isn't even earning enough to clear $33,000 — the 2026 poverty line in the U.S. Some of the poorest states are living on incomes between $11,000 to $13,000.

The gap appears to be widening, and the question becomes, “Where does your state fall and what does it mean for you?”

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Key Findings

• The South is where income inequality is the highest. Seven of the 10 most unequal states are in the South. If you live in Louisiana, Mississippi, Arkansas or Alabama, you're likely earning less and have fewer opportunities to build wealth compared to others in different states.

• New York has the highest inequality in the nation, while Utah has the lowest. The inequality in New York is twice as large as the inequality in Utah.

• The poverty line is out of reach for the poorest households. The poverty line is $33,000. The poorest households in states like Mississippi, Louisiana, Alabama and West Virginia live on about $11,000 to $13,000.

• A raise alone likely won’t close the income gap for most Americans. In 31 states, the top 20% of earners make more than $250,000 annually, while in 39 states, the bottom 20% earn less than $22,000.

• The income divide is more of a chasm than a minor gap. In Connecticut and Louisiana, the top 20% makes almost 20 times more than the bottom 20%.

• Rich states aren’t equal states. The richest states, even with higher-income households, have a large divide between the bottom and the top.

States Where the Wealth Gap Hits Hardest

MoneyLion was able to determine the amount of income inequality by using Gini index data from the U.S. Census Bureau's 2024 American Consumer Survey. The Gini index is a common way economists evaluate how evenly income is distributed across a population. Higher Gini scores indicate greater income inequality, while lower scores reflect a more equal distribution of income.

Where Inequality Is Highest and Lowest

The States Where It’s Hardest To Get Ahead

New York, Connecticut, Louisiana, California and Massachusetts represent the top five states with the highest inequality.

• Higher inequality states have a higher cost of living. Your real earnings represent what you have left over after paying for housing, transportation and food.

• A Louisiana resident in the top 20% of earners makes nearly 20 times more than someone in the bottom 20%. The state has one of the country's highest poverty rates, weaker education outcomes and a shrinking middle class. Over time, those factors have contributed to a widening gap between top and bottom earners.

• New York ranks as the most unequal state in the country, yet its median household income is only about $2,000 higher than the national average. The national median household income is $83,730. New York's small gap of $2,244 suggests the state's extreme wealth — particularly in finance, media and tech — remains concentrated among top earners rather than broadly distributed.

• Your profession matters. In states like California, high-paying tech and finance jobs often exist alongside a much larger number of lower-paying service positions, creating a wider income divide.

States Where Income Is More Evenly Distributed

New Hampshire, Wisconsin, Iowa, Alaska and Utah are states where the Gini index is low.

• Mid-skill jobs are rewarded. In states where income is more evenly distributed, there is more emphasis on trade jobs. Electricians, HVAC work and similarly situated jobs often earn between $60,000 to $80,000.

• Residents in lower inequality states have more purchasing power. For example, New York's median household income of $85,974 and Iowa's $75,059 look similar in theory. But after rent, food and transportation costs, the Iowa worker frequently has more purchasing power.

• A mix of industries supports a stronger middle class in states like New Hampshire, Wisconsin, Iowa, Alaska and Utah. Many roles are accessible without a four-year degree and offer reliable salaries of $45,000 to $80,000 while avoiding student loan debt.

• You can raise income levels in lower inequality states. In Utah, the bottom 20% of earners make $25,250 annually — more than double the $11,514 earned by the bottom 20% in Louisiana. Access to stronger job markets, certifications and higher-paying industries can help raise earnings in states with lower income equality.

Expert Take: What This Means for Your Money

As a Certified Financial Health Counselor and personal finance expert, I've seen how income inequality can impact people differently depending on where their income falls within the local economy.

Here’s what this can look like in practical terms:

Financial Takeaways for Those Who Are Struggling in High-Inequality States

• Make every dollar count in a high-inequality state: This doesn’t mean you’re irresponsible with your money, but it does mean you may need to pay closer attention to where your dollars are going. Shop at discount grocers, avoid brand names and dedicate any money that's left over to saving or investing.

• Even if you don’t owe taxes, file a return: Those who make $25,000 to $40,000 are able to earn at least $7,830 in earned income tax credit (EITC). Also, if you have children, you can qualify for the child tax credit (CTC). If you don’t file taxes, you can’t claim the credit.

• Protect your credit score: Since your income is not as high, you likely don’t have hundreds of dollars saved in a savings account. If you have an emergency, you're likely going to get a personal loan. Keeping your credit score high means better rates and can prevent you from going into a debt spiral.

• Find out if you qualify for a SNAP program: You can use your state’s EBT calculator to qualify for the SNAP program for food assistance.

• Consider reductions: Many high-inequality states offer rate reductions based on your income. In California, for example, you can apply for California Alternate Rates for Energy (CARE), which may result in a 30% to 35% reduction in utilities or 20% for a natural gas bill. Your state may offer something similar.

• Look into Volunteer Income Tax Assistance (VITA): VITA is a program that is available to those who earn less than $60,000. You may qualify for a free tax preparer who can help you claim every credit and deduction.

• Stop paying bank fees: Overdraft fees, minimum monthly maintenance fees and ATM charges over a year can cost you between $200 to $500. Find an online bank that charges no minimum fees. The amount you save could help you open a savings account.

• Consider buy-nothing groups: In buy nothing groups, especially in high-cost states, people in the community are willing to give away quality furniture, appliances and clothing for free.

• Negotiate your bills: Medical bills, credit card interest rates and utility bills can often be negotiated. Call these companies and let them know you’re having financial hardship and ask whether they can offer some assistance in reducing your interest rate or the amount you owe.

How To Stay Ahead — No Matter Where You Live

If you live in a high-inequality state like Connecticut, Massachusetts or California, you’ll likely need to embrace a strategic personal financial approach:

• Evaluate your extra expenses: Make a list of your current entertainment subscriptions and memberships and find out if there are items you can cut. A savings of $10 to $20 can add up over the course of a year across multiple subscriptions.

• Don’t fall into tempting luxury: That new purse or watch may seem too hard to resist, but purchasing these “wants” can trap you in a debt cycle. If this is a “want” you can’t live without, decide whether this discretionary spending won’t push you into more debt.

• Automate your savings: Use a round-up app. If you save a minimum of one or two dollars each time, you’ll have a small amount accumulated over the next few months.

• Advocate for a raise: You want enough income that keeps up with the rate of inflation. At the very least, salary transparency laws require employers to reveal how much a job pays.

• Strategize where to live: In high-inequality states, pick a location where the Gini index is low, but the median income for households is high. You’ll likely have better access to services, and housing costs may not fluctuate as much.

• Minimize your taxable income: If you have a 401(k) or a health savings account (HSA), maximize how much you contribute. If your employer participates in a match, make certain that you contribute enough to take advantage of this perk.

• Move idle cash to capitalize on compound growth: Let your cash work for you. Place cash in a money market account, high-yield savings or investment account to allow your funds to grow at a 4% or 5% interest rate.

Methodology

For this piece MoneyLion looked at all U.S. states, and found the following factors for each: (1) Gini index measuring income inequality (definition below); (2) bottom 20% of earners average income; (3) top 20% of earners average income; (4) top 5% of earners average income; (5) bottom 20% of earners share of wealth; (6) top 20% of earners share of wealth; (7) top 5% of earners share of wealth; (8) median household income; and (9) average household income. For rankings, only factor (1) was considered.

All data was sourced from the 2024 American Community Survey as conducted by the US Census Bureau.

The Gini index is a summary measure of income inequality. The Gini coefficient ranges from 0, indicating perfect equality (where everyone receives an equal share), to 1, perfect inequality (where only one recipient or group of recipients receives all the income). The Gini is based on the difference between the Lorenz curve (the observed cumulative income distribution) and the notion of a perfectly equal income distribution.

Data was collected and up to date as of April 23, 2026.

Photo credit: AlenaMozhjer / iStock