Which States Make the Most Money in the U.S.?
Uncover the diverse ways state economic prosperity is measured, from total output to individual earnings.
To understand which states generate the most wealth, various economic prosperity measures must be considered. A clear understanding of these indicators is essential to assess a state’s financial standing and economic strength.
Defining “Makes the Most Money”
Which states “make the most money” depends heavily on the economic metric used. Gross Domestic Product (GDP) by state, often called Gross State Product (GSP), measures the total monetary value of all finished goods and services produced within a state’s borders.
Another perspective focuses on individual and household income. Per capita income calculates the average income per person in an area, dividing total income by total population. This metric provides insight into the average standard of living.
Median household income, in contrast, represents the income level where half of all households earn more and half earn less. This offers a more typical view of household earnings by mitigating the skewing effect of extremely high or low incomes.
Top States by Economic Output
The overall economic output of states, measured by GSP, reveals significant disparities. In 2024, California ranks as the state with the highest GDP, reaching $4.103 trillion. This output reflects the scale and diversity of its economy.
Following California, Texas holds the second position with a GDP of $2.709 trillion, showcasing its vast industrial and energy sectors. New York secures the third spot, contributing $2.297 trillion to the national economy in 2024.
These leading states collectively account for a significant portion of U.S. economic activity. A high GSP indicates a state’s capacity for large-scale production and robust economic activity, driven by diverse industries and a sizable workforce.
Top States by Individual Income
When examining individual earnings, different states lead in per capita and median household income. For 2024, Washington, D.C., though not a state, reported the highest per capita personal income at $108,233, driven by high-paying government and professional jobs.
Among states, Massachusetts followed with $93,927, and Connecticut ranked third at $93,235. These figures include pre-tax earnings from wages, benefits, and investment income, providing a broad measure of individual financial well-being.
Median household income represents the midpoint of household earnings. In 2024, after adjusting for cost of living, the District of Columbia again led with a median income of $162,265.
Among states, Hawaii recorded a median household income of $141,832, followed by Massachusetts at $127,760. Median household income differs from per capita income as it considers the combined earnings of all individuals within a household, providing a picture of typical family financial strength.
Factors Contributing to Economic Performance
Several underlying factors contribute to why certain states rank high across various economic indicators. The presence of major industries plays a substantial role; states with strong technology, finance, energy, or manufacturing sectors demonstrate higher economic output and income levels. For instance, California’s tech industry and Texas’s energy sector are significant contributors to their respective GDPs.
Population size and density also influence total economic output, as larger populations correlate with a greater workforce and consumer base. Natural resources, such as oil, gas, or agricultural land, can provide a foundational economic advantage for some states.
States that foster innovation and act as research hubs tend to attract high-skilled labor and businesses, boosting per capita incomes. Strategic geographic locations, facilitating trade and logistics, also contribute to a state’s economic performance.