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Richard Rider

CA’s “median household income” adjusted for COL is worse than all but 10 states. Actually, all but TWO states!

Whenever folks complain about California’s oppressive taxes, fees, cost of living, over-regulation, lousy roads, high utility costs and legal climate, progressives usually come back with this:  “But California has the world’s fifth largest economy” — delivered with a smug “gotcha” look.

And it IS true — CA DOES have the fifth largest economy in the world.  But that figure by itself tells us little about the prosperity of the PEOPLE in our Golden State.  For instance, Red China has a much bigger economy (GDP) than California.  Does anyone think that on average the Chinese are more prosperous than Californians?  Well, anyone who’s not a Bernie Sanders acolyte?

Let’s look at the vaunted California prosperity compared to the other states — the only comparison that matters.  Our CA median household income (half make more, half make less) is the 8th best in the nation.  Seven states have a higher median household income.  So CA ranks high, but not the best.

See chart #1 below.

But then we have to consider that income’s purchasing power.  We have to factor in the states’ cost of living (COL).  Here’s the shocking result:  When states’ median household income is adjusted for the CA COL, California ranks worse than all but 10 states. That’s right — households in 39 states are on average more prosperous than Californians.

I ran this comparison a couple years ago, and CA was the 37th worst.  Now we are #40. California’s stately decline continues.

See chart #2 below.

But that’s not all.  Remember that CA holds 12.1% of the entire nation’s population.  Our high COL significantly raises the national COL average. Take CA out of the national average — comparing CA with just the other 49 states — and the disparity is even worse.
https://www.census.gov/quickfacts

Compared to the national average, the CA COL is “only” 39.1% higher. But compared with the other 49 states, the CA COL is 47.0% higher, which would move us even lower towards the bottom of the prosperous states. Only Oregon and Hawaii would still be lower than our Golden State.

This abysmal level of Golden State prosperity is the bottom line reason why middle class Californians are increasingly leaving this lovely place for other states.  In 2018, 156,000 MORE Californians left for other states than came to CA FROM other states (net domestic migration).  I emphasize that the 156,000 is a NET domestic migration figure.  I’m sure that the 2019 figure will be higher.

Our state’s low level of prosperity is further confirmed by California’s real (“supplemental”) 2017 poverty rate.  This rate is the new census bureau standard adjusted for the COL.  CA is still easily the worst in the nation at 19.0%. We are 43.9% higher than the average for the other 49 states. Texas is 14.7%. Our CA poverty rate is 34.6% higher than Texas.

https://www2.census.gov/programs-surveys/demo/tables/p60/265/table5.xls

 

NOTE:  Two charts below compare the states median household income.  Of  the two, the second chart is the important one — ranking states by COL-adjusted household income.

State Median Household

Income Adjusted for State COL

Chart #1

Rank by

Household Income

State Median

Household

Income

COL Index Median Household

Income Adjusted

for COL

Median

Household

Income Rank

Maryland $80,776 130.2% $62,040 1
New Jersey $80,088 125.4% $63,866 2
Hawaii $77,765 192.1% $40,482 3
Massachusetts $77,385 134.2% $57,664 4
Connecticut $74,168 128.9% $57,539 5
New Hampshire $73,381 108.4% $67,695 6
Alaska $73,181 129.7% $56,423 7
California $71,805 139.1% $51,621 8
Virginia $71,535 101.3% $70,617 9
Washington $70,979 110.2% $64,409 10
Colorado $69,117 105.9% $65,266 11
Minnesota $68,388 101.9% $67,113 12
Utah $68,358 98.5% $69,399 13
New York $64,894 135.3% $47,963 14
Rhode Island $63,870 120.9% $52,829 15
Illinois $62,992 95.0% $66,307 16
Delaware $62,852 107.1% $58,685 17
North Dakota $61,843 98.5% $62,785 18
Wyoming $60,434 95.7% $63,149 19
Oregon $60,212 133.1% $45,238 20
Nebraska $59,970 92.3% $64,973 21
Wisconsin $59,305 96.3% $61,584 22
Texas $59,206 91.5% $64,706 23
Pennsylvania $59,195 98.8% $59,914 24
Iowa $58,570 92.0% $63,663 25
Nevada $58,003 109.2% $53,116 26
Vermont $57,513 116.9% $49,198 27
Arizona $56,581 101.0% $56,021 28
South Dakota $56,521 98.5% $57,382 29
Kansas $56,422 89.6% $62,971 30
Maine $56,277 117.3% $47,977 31
Georgia $56,183 90.6% $62,012 32
Michigan $54,909 89.5% $61,351 33
Indiana $54,181 90.5% $59,869 34
Ohio $54,021 92.2% $58,591 35
Missouri $53,578 88.3% $60,677 36
Montana $53,386 105.0% $50,844 37
North Carolina $52,752 94.4% $55,881 38
Florida $52,594 99.1% $53,072 39
Idaho $52,225 93.8% $55,677 40
Tennessee $51,340 88.9% $57,750 41
South Carolina $50,570 95.9% $52,732 42
Oklahoma $50,051 87.2% $57,398 43
Kentucky $48,375 91.7% $52,754 44
Alabama $48,123 89.2% $53,950 45
New Mexico $46,744 91.4% $51,142 46
Louisiana $46,145 93.6% $49,300 47
Arkansas $45,869 87.7% $52,302 48
Mississippi $43,529 86.7% $50,206 49
West Virginia $43,469 92.1% $47,198 50
US Average $60,336 100%

Chart #2

Rank by COL-ADJUSTED Household Income

State Median

Household

Income

COL Index Median Household

Income Adjusted

for COL

COL

Adjusted

Rank

Virginia $71,535 101.3% $70,617 1
Utah $68,358 98.5% $69,399 2
New Hampshire $73,381 108.4% $67,695 3
Minnesota $68,388 101.9% $67,113 4
Illinois $62,992 95.0% $66,307 5
Colorado $69,117 105.9% $65,266 6
Nebraska $59,970 92.3% $64,973 7
Texas $59,206 91.5% $64,706 8
Washington $70,979 110.2% $64,409 9
New Jersey $80,088 125.4% $63,866 10
Iowa $58,570 92.0% $63,663 11
Wyoming $60,434 95.7% $63,149 12
Kansas $56,422 89.6% $62,971 13
North Dakota $61,843 98.5% $62,785 14
Maryland $80,776 130.2% $62,040 15
Georgia $56,183 90.6% $62,012 16
Wisconsin $59,305 96.3% $61,584 17
Michigan $54,909 89.5% $61,351 18
Missouri $53,578 88.3% $60,677 19
Pennsylvania $59,195 98.8% $59,914 20
Indiana $54,181 90.5% $59,869 21
Delaware $62,852 107.1% $58,685 22
Ohio $54,021 92.2% $58,591 23
Tennessee $51,340 88.9% $57,750 24
Massachusetts $77,385 134.2% $57,664 25
Connecticut $74,168 128.9% $57,539 26
Oklahoma $50,051 87.2% $57,398 27
South Dakota $56,521 98.5% $57,382 28
Alaska $73,181 129.7% $56,423 29
Arizona $56,581 101.0% $56,021 30
North Carolina $52,752 94.4% $55,881 31
Idaho $52,225 93.8% $55,677 32
Alabama $48,123 89.2% $53,950 33
Nevada $58,003 109.2% $53,116 34
Florida $52,594 99.1% $53,072 35
Rhode Island $63,870 120.9% $52,829 36
Kentucky $48,375 91.7% $52,754 37
South Carolina $50,570 95.9% $52,732 38
Arkansas $45,869 87.7% $52,302 39
California $71,805 139.1% $51,621 40
New Mexico $46,744 91.4% $51,142 41
Montana $53,386 105.0% $50,844 42
Mississippi $43,529 86.7% $50,206 43
Louisiana $46,145 93.6% $49,300 44
Vermont $57,513 116.9% $49,198 45
Maine $56,277 117.3% $47,977 46
New York $64,894 135.3% $47,963 47
West Virginia $43,469 92.1% $47,198 48
Oregon $60,212 133.1% $45,238 49
Hawaii $77,765 192.1% $40,482 50

“Median household income” is provided by the Henry J. Kaiser Foundation, drawing from U.S. Census data for 2017:

https://www.kff.org/other/state-indicator/median-annual-income/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

COL figures are from the link below.  The CA COL is 39.1% higher than the national average (an average that includes CA) in 2nd quarter 2019. The CA COL is 66.1% higher than the TX COL.

https://meric.mo.gov/data/cost-living-data-series