These are the 9 states where Americans are financially better off than in 2020 - is yours on the list?

Most Americans are feeling stressed about money because prices have gone up a lot in the last few years. A new study by MyPerfectResume looked at how people’s finances changed between 2020 and 2024. MyPerfectResume compared wages in all 50 U.S. states with inflation to see where people gained or lost real money, the study said.

Data from the Bureau of Labor Statistics showed that the average American worker’s pay increased by about 18% during this time, as reported by USA Today. Average pay rose from around $64,000 in 2020 to about $75,600 in 2024, according to Bureau of Labor Statistics data. Even though paychecks got bigger, inflation rose even faster during these years, the data showed.

Inflation increased by roughly 21% from 2020 to 2024. Because prices rose more than wages, the average American actually lost money in real terms. After adjusting wages for inflation, workers across the country lost about 2.6% of their income. Jasmine Escalera, a certified career coach, explained this by saying Americans got a raise on paper but a pay cut in reality.

States losing money

The study showed that where a person lives strongly affected how their finances changed. In total, people in 41 states lost purchasing power between 2020 and 2024, as per USA Today. Only nine states showed real improvement in living standards after adjusting wages for local prices. Idaho was the top state where workers became better off, with purchasing power rising by 3.1%. Florida was next, where workers saw a 2.6% gain in purchasing power. Workers in Washington state experienced a 2.3% increase in purchasing power. Montana also recorded a 2.3% gain in real income over the same period. Wyoming workers saw their purchasing power rise by 1.8%.

In South Carolina, purchasing power increased by 1.5% between 2020 and 2024. North Carolina workers gained about 0.9% in purchasing power. Tennessee also recorded a 0.9% rise in purchasing power during this period.Maine showed a small but positive gain, with purchasing power rising by 0.5%. In Utah, workers were able to maintain their standard of living, with no real gain or loss.

In every other state, workers lost purchasing power once inflation was taken into account, the study showed. New Jersey had the largest drop, with workers losing about 7.0% of purchasing power, as cited by USA Today. Rhode Island followed closely, with a 6.9% decline in real income. Maryland workers saw their purchasing power fall by 5.4%. Massachusetts experienced a 5.3% drop in purchasing power. New York also saw a 5.3% decline in real income between 2020 and 2024.

High pay not enough

Jasmine Escalera said the findings show that a high-paying job does not always mean a better life. She added that many American workers entered the mid-2020s with higher pay on paper but less real financial freedom. Even in high-wage states like California and Massachusetts, rising living costs wiped out most pay gains, Escalera said, as noted by USA Today. Despite losing purchasing power, many workers chose to stay in their jobs for security instead of changing careers.

The study found that housing costs took up a large share of people’s income increases. Grocery prices also rose quickly and reduced how much people could actually afford. Energy costs increased and added extra pressure to household budgets. Insurance costs went up and further reduced real income for many workers. Spending on everyday essentials became a bigger burden for Americans than it was in 2020.

FAQs

Q1. Which U.S. states are financially better off than in 2020?

Nine states, including Idaho, Florida, and Washington, saw real income growth after adjusting wages for inflation.

Q2. Why did most Americans lose money despite higher pay?

Because inflation rose faster than wages, reducing people’s real purchasing power.