Richest US states mapped as new study shows huge economic disparities amid cost of living crisis

Dramatic economic disparities threaten people's lives and well-being across the US amid a devastating cost of living crisis, a report has shown.

Although the latest figures from the Federal Reserve put the median annual income in the US at about $74,600, the gap between the wealthy and the less fortunate is stark, with some raking in significantly more while others languish in poverty.

The recent report, put together by Wallethub, highlights the uneven distribution of wealth in the US, with certain states like Virginia , New Jersey , and New York exhibiting significant income discrepancies.

The high incomes in the top percentiles pull these states up in the rankings, despite the challenges for those in the lower income brackets.

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The recent study offers a glimpse into Americans' financial health by comparing the 50 states plus the District of Columbia using three metrics that measure income for different population segments, adjusted for the cost of living index (COLI) to identify the states where residents have the highest incomes. The metrics are average incomes for the top 5%; the bottom 20%; and the state's median earners.

Wallethub analyst Cassandra Happe said: "The highest-earning 10% of individuals in the United States earn over 12 times more than those in the lowest-earning 10%, based on the latest Census data.

"By measuring the income of various percentiles against a state's median income, we can better identify where income disparities are more prevalent, which could help us better understand why residents of certain states struggle more to make ends meet."

Zooming in on Virginia, it emerges as the state with the most affluent residents when considering the median, top 5%, and bottom 20% of earners.

In Virginia, the top 5% pull in an average of $518,296 annually, while the bottom 20% earn about $18,694. Despite the vast difference, both figures are the third-highest nationwide, indicating that in Virginia, both the wealthy and the poor fare better than in other states.

The average annual income in Virginia stands at $89,393, placing it as the 17th highest in the nation. This suggests a significant wealth disparity among residents of Old Dominion.

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In New Jersey, the average income is the second-highest in the country when considering low, high, and median earnings. The top 5% of earners in the state rake in an impressive average of $505,621 annually, the fourth-highest nationwide.

Additionally, the median income in the Garden State is a substantial $117,847, ranking sixth-highest. However, those in the bottom 20% of the population are only slightly above average, earning $16,445 per year, which ranks as the 21st-highest nationally.

New York ranks third for the highest average income, considering the top 5%, bottom 20%, and median earnings. The top 5% of earners in the Empire State enjoy an average annual income of $553,436, the highest in the country.

Conversely, the bottom 20% of earners make an average of $13,301 per year, placing 44th out of the 50 states and the District of Columbia. This study gives more weight to the high-income bracket, hence New York's high ranking. The median annual income in New York is also commendable, at $91,366, ranking as the 13th-highest in the country.