Average Salary by State in 2023 in the U.S. and Its Projection for 2024

Updated on January 2, 2024
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Andrea Mercado
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average salary by state

In 2023, the data analysis of state salaries showed that Massachusetts and New York are the top two highest-paying regions in the country. Their average annual incomes are over $74,500, surpassing the national average by over $15,000 yearly. 

Despite these high incomes, the increasing housing costs mean that salaries only partially cover the rising living expenses, especially for those earning minimum wage. 

How much do they need to live, how much do they make on average, and which state pays the best hourly rates in the U.S.? Stay with us to explore the average salary by state in 2023 and its projected trends for 2024.

Average salary by state

What's the Average Salary in the U.S.?

According to the Bureau of Labor Statistics, the average annual salary in the U.S. reached $59,428 in 2023, equaling $28.34 per hour. But that national figure masks significant variation across states. 

Many factors impact incomes, from education levels to experience and job type, yielding household earnings ranging from $45,060 to $335,200. And location contributes significantly. 

With minimum wage laws differing by state, average pay fluctuates too. From a high of over $70,000 in Massachusetts to just around $45,000 in Mississippi, average salaries fracture sharply between regions.

Average salary by state

Top-paying states in 2023

The average annual salary is highest in Massachusetts - $76,600

Analysis of state wage data shows Massachusetts residents benefit from the highest average salary nationwide, with yearly earnings reaching $76,600 in 2023. That figure outpaces U.S. averages by over $17,000.

Yet the state's soaring housing costs mean salaries fall short of living wages for many. Research indicates individuals require $87,909 to afford Massachusetts expenses, an over $11,000 gap from current average incomes.

With the country's third highest cost of living after Hawaii and California, many struggle in Massachusetts despite leading pay scales. However, the new $15 minimum wage in 2023 brought some hope.

The average annual salary in New York is $74,870, ranking second in the U.S.

The 2023 state salary figures position New York as the second-highest paying area across the country, with average yearly earnings hitting $74,870. That surpasses the national average by more than $15,000 annually.

Despite substantial salaries, New York’s soaring costs mean top-tier earnings fail to stretch as far as in other regions. 

With taxes and expenses factored in, $250,000 equals $83,000 in real purchasing power, presenting ongoing affordability issues amid leading pay.

The average 2023 California salary was $73,220, the third-highest in the U.S.

Analysis shows California boasted the third-highest average salary among U.S. states, reaching $73,220 annually in 2023. And pay scales continue rising, with the minimum wage set to hit $16 per hour in 2024.

That means full-time workers must earn at least $66,560 as part of the increase to meet salary exemption thresholds. 

While already outpacing national averages, California’s aggressive wage hikes position the state for further gains. However, with inflation lingering and the highest statewide costs in the continental U.S., many still need to pay to match soaring living expenses.

Average salary by state

States paying the lowest salaries in 2023

The average Mississippi salary is $45,180, the lowest in the U.S.

2023 income data positions Mississippi as the lowest-paying state in the U.S., with average annual earnings of just $45,180. 

Mississippi, one of five states in the South without a state minimum wage law, adheres to the federal minimum wage of $7.25 per hour. This absence of a state minimum wage means the federal minimum sets the baseline for employee compensation.

However, the data shows wages rising 2.1% in some counties in 2023 - a hopeful sign amid bleak earning statistics.

The average Arkansas salary is $46,800, the second lowest in the U.S.

According to Forbes, Arkansas is the second lowest-paying state in the U.S., with an average annual salary of $46,800, according to Forbes data from 2023. 

Getting into the details, the average hourly rate stands at $18.74 in Arkansas, as reported by talent.com, with entry-level salaries typically commencing at $27,300 yearly.

The average salary in West Virginia is $49,170, the third lowest in the U.S.

West Virginia holds the third position for the lowest average salary among U.S. states, from $44,979 to $49,170 annually in 2023.

According to Talent.com, entry-level salaries in West Virginia begin at $31,191, while experienced workers can earn up to $114,896.

However, persistent challenges persist, especially for women without college degrees, who face substantial barriers to accessing well-paid employment.

The state's unemployment rate remains steady at 3.7%, slightly above Mississippi and Arkansas for bottom-tier income rankings.

Compared to the national salary averages, West Virginia falls approximately $10,000 below national salary averages. 

Average salary by state

Exploring other variables in average U.S. salaries in 2023

Diving into the salary landscape in the U.S., it's evident that earnings evolve significantly throughout the years and a worker's career. 

Let's break down the numbers.

Early Career Earnings: Ages 20-24

  • For American men aged 20-24, the average annual salary in 2023 is $40,612.
  • A gender pay gap emerges early, with men in this age bracket outpacing their female counterparts by over $4,000 in median annual earnings.
  • Specifically, U.S. women aged 20-24 receive around $36,504 in median pay.

Mid-Career Transformations: Ages 25-34

  • For people aged 20-24, the average annual salary in the U.S. in 2023 was $54,184.
  • The wage landscape undergoes a subtle shift in the 25-34 age group. As of early 2023, women in this age bracket earn, on average, 92 cents for every dollar earned by their male counterparts, showcasing an 8-cent gender pay gap.
  • Surprisingly, this gap is notably smaller than the overall workforce, where the gender pay gap for all ages stands at 18 cents during the same period.

Late-Career Peaks: Ages 45-54

  • According to the U.S. Bureau of Labor Statistics, Americans aged 45-54 boast the highest median income across all age groups, reaching $1,233 weekly.
  • However, pay inequality persists, especially among men and women in their late-career years.

    Men aged 45-54 bring in a median salary of $72,228 annually, a figure over $15,000 higher than the $57,096 median yearly pay for women of the same age, resulting in a 26.5% income disparity favoring males in this age range.

The U.S. gender pay gap in the U.S.

Analysis of 2023 wage data shows women in the U.S. continue earning 18 cents less than their equivalent male counterparts - with the pay gap persisting over the past 20 years:

  • While females aged 25-34 face a more negligible 8-cent difference, inequality emerges early and compounds over careers.
  • Younger women also gained ground, with a 26-cent deficit in the 1980s shrinking to today's 8-cent figure.

The data attributes narrowing wage gaps to women's advancing education and experience and reducing occupational concentration over decades. 

But with under half of West Virginian females employed, barriers to high-paying work linger.

Average salary by state

Summary: Average salary by state in 2023 in the US

1. The average annual salary in Massachusetts is $76,600

2. The average annual salary in New York is $74,870, ranking second in the U.S.

3. The average 2023 California salary was $73,220, the third-highest in the U.S.

4. The average Mississippi's salary is $45,180, the lowest in the U.S.

5. The average Arkansas salary is $46,800, the second lowest in the U.S.

6. The average salary in West Virginia is $49,170, the third lowest in the U.S.

7. Early Career Earnings: Ages 20-24

8. Mid-Career Transformations: Ages 25-34

9. Late-Career Peaks: Ages 45-54

10. The U.S. gender pay gap in the U.S.

FAQ

Which region in the United States has the highest average salary?

The Northeast leads the regions with the highest average salary, boasting an average income of $65,383.

Following the Northeast, the West comes next with an average salary of $60,579, the Midwest follows at $56,114, and the South has an average salary of $54,718. 

Which state in the U.S. offers the highest average salary for teachers?

New York takes the lead as the state with the highest average teacher salary, standing at an impressive $92,222, according to the World Population Review. This figure is notably 11.5% above the national average annual teacher salary.

What occupations are expected to experience significant growth in 2024?

The Bureau of Labor Statistics (BLS) highlights several occupations with substantial projected growth rates from 2021 to 2031. 

Among them are Nurse Practitioners with an impressive 46% growth rate, Cooks in restaurant settings at 37%, Information Security Analysts with 35%, Statisticians at 33%, Web Developers showing a 30% growth, and Physician Assistants with a 28% growth rate. 

Final Thoughts

In 2023, Massachusetts had the highest average salary at $76,600, followed closely by New York and California. Conversely, there are concerns as Mississippi, Arkansas, and West Virginia report lower averages at $45,180, $46,800, and $49,170, respectively.

Wage differences persist across career stages, significantly impacting women and minorities, with the 45-54 age group having the highest peaks. However, the Bureau of Labor Statistics expects growth in specific medical roles for 2024, like nurse practitioners, physician assistants, web developers, and cooks.

The data underscores the fragmented geography of earning potential in the U.S., emphasizing the importance of targeted skill development for individuals to maximize salaries in the coming years.

Sources

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Andrea Mercado is a tech-focused journalist and copywriter with over 5 years of experience covering innovation, edtech, AI, and internet trends across media outlets. She is passionate about how technology can democratize access to education and is an avid learner when it comes to emerging tech like AI. Her articles and webinars help readers stay informed on the latest tech developments.
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