The Five Poorest US States

November 4th, 2018

Katrina hurricane
Broken piers on Biloxi Beach, Mississippi, after Hurricane Katrina.

The median household income in the US is $59,039, but some states’ families earn far less than that. In a few states, the average family income barely cracks $40K. When assessing the poorest states, common causes of financial stagnation include a lack of economic diversity, with too much emphasis on agriculture, and a historic reliance on outdated industries.

In recent years, the US’s financially challenged states have been playing catch-up, slowly diversifying their economies, with varying degrees of success.

This article will take a brief look at the five poorest states and offer some data that may shed light on why they’ve fallen on hard times.

5. Kentucky

Kentucky is the fifth poorest state in the country, with a median household income of $45,215. Located in the east south-central region of the United States, Kentucky has a total area of 40,408 sq mi, making it the 37th largest state. Ranked 26th in population with close to 4.5 million residents, Kentucky has a population density that ranks 22nd in the nation, at 110 people per square mile.

The economy of Kentucky is largely agricultural. The state ranks in the top ten nationally in goat farming and beef cattle production. It’s the 14th largest producer of corn and is considered a hub of the tobacco industry. In recent years, Kentucky has expanded its industries to include auto manufacturing and energy fuel production.

Kentucky's unemployment rate is 4.5 percent, and 19 percent of the state’s families live in poverty.

4. Alabama

With a total area of 52,419 sq mi, Alabama ranks 30th in size, and it has the fourth lowest median household income in the country, at $$44,765. Just under 5 million residents live in Alabama, making it the 24th-most populous state, and the 27th-most densely populated state.

Located in the southeastern region of the United States, Alabama’s early economic history was dominated by agriculture. Today, however, the top five industries in Alabama are automotive, chemical, technology, forestry, and aeronautics.

Alabama’s unemployment rate is 4.1 percent, and 19.2 percent of the state’s households live below the poverty line.

3. West Virginia

West Virginia families have the 3rd-lowest household incomes in the country, at $42,019. A relatively small state, West Virginal ranks 41st in size, with a total area of 24,230 sq mi. It is the 38th most populous state, with just over 1.8 million residents, and it has the 29th highest population density, with 77.1 residents per square mile.

Mining has long been the West Virginia’s key to economic growth, but that industry has declined dramatically in recent years. These days, leading industries in West Virginia are chemicals, biotech, energy, aerospace and automotive.

The unemployment rate in West Virginia is 5.2 percent, the highest in this group, and nationally, second highest. The percentage of West Virginia families living in poverty is 18.3.

2. Arkansas

The country’s second poorest state is Arkansas, with a median household income of $41,995. It has a total area of 53,180 sq mi, making it the 29th largest state. With just over 3 million residents, Arkansas has only 56.4 people per square mile, making it the 34th most densely populated state.

Arkansas’ top industry is agriculture, adding around $16 billion to the state’s economy annually. Its main agricultural products are chickens, rice, soybeans, cattle, and cotton. Other notable industries in the state are transportation and logistics, and food manufacturing.

Arkansas has the best unemployment rate of these five states, at 3.5 percent, but 18.7 percent of its families live in poverty.

1. Mississippi

Mississippi households are currently the poorest in the country, with a median income of $40,593. Like, Alabama, the fourth poorest state, Mississippi is located in the southeastern region of the United States, on the Gulf of Mexico. It’s the 32nd largest and 32nd most populous state in the country.

Several factors have contributed to Mississippi's economic struggles, including the state’s dependence on cotton agriculture, and delayed development of the ragged terrain comprising the Mississippi Delta. Additionally, an almost continuous string of hurricanes and floods plagued Mississippi during the late 19th and early 20th century.

Mississippi is comprised mostly of rural land—all together, its farms span 11 million acres. The state’s primary crops include cotton, soybeans and rice. Nevertheless, currently it is manufacturing, not agriculture, that is Mississippi's top revenue-generating sector.

The unemployment rate for Mississippi is 4.8 percent, and with 21.9 percent of its residents living below the poverty line, more families in Mississippi struggle financially than in any other state.