New York is one of the highest-earning states in the country, but it also has one of the nation’s widest income gaps, according to a new WalletHub study released this week.
The state ranks 3rd overall for income after adjusting for cost of living, largely due to exceptionally high earnings among the top 5% of households. But the same report places New York 45th for the average income of the bottom 20%, revealing a striking wealth divide.
How New York stacks up in the income rankings
WalletHub evaluated all 50 states and Washington, D.C. using three key metrics:
- Top 5% average income (adjusted): $575,505 — Ranked 1st
- Median household income (adjusted): $95,033 — Ranked 15th
- Bottom 20% average income (adjusted): $13,647 — Ranked 45th
While the wealthiest New Yorkers earn more than in any other state, the poorest earn far less than their counterparts in most of the country.
Cost of living and capital access widen the gap
Dr. Peter Orazem, Professor Emeritus at Iowa State University, points to housing and capital access as key drivers of this disparity:
“After correcting for cost of living, high incomes in places like New York don’t stretch as far as they look on paper. Differences in housing, education levels, and investment access drive long-term wage gaps.”
In urban states like New York, where living costs are high, wealth tends to accumulate in smaller, concentrated populations—often leaving low-income workers behind.
Policy experts call for opportunity over redistribution
Dr. Marc Fusaro of Walsh University emphasized that the solution to income inequality lies in creating economic pathways:
“The best thing government can do is expand opportunity—reduce barriers for people to work, start businesses, or invest in their future.”
Fusaro added that while government assistance is helpful, overregulation or overtaxing productivity can dampen long-term growth and innovation.
Why the numbers matter
With a national median income of approximately $81,000, New York’s $95,000+ median appears strong. But that average conceals sharp contrasts across the population. WalletHub’s data underscores how income inequality in high-cost states often reflects systemic gaps in education, job access, and capital investment.
For low-income New Yorkers, everyday challenges include:
- Limited access to affordable housing
- Rising costs of healthcare and childcare
- Lack of savings or access to credit
- Difficulty finding quality jobs or reliable transportation
These barriers make upward mobility elusive, even in one of the highest-earning states in the country.
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