Photo: Nick DeWolf
You probably know that there are plenty of challenges to making a living in today’s economy.What you may not know is how significantly the place you live can impact some of those challenges.
According to the Bureau of labour Statistics, average wages range from a low of $33,930 in Mississippi to a high of $53,700 in Massachusetts. Unemployment rates range from a low of 3.3 per cent in North Dakota, to a high of 12.6 per cent in Nevada.
Tax rates and cost of living also vary greatly by state. So are some states really better for making a living than others?
For the second year in a row, MoneyRates.com has calculated a list of the best and worst states to make a living.
The process factors in each state’s average income, state tax rate, cost of living and unemployment rate to create an adjusted average income figure that serves as the basis for these rankings.
In a separate article, you can find the 10 best states to make a living in 2012. Here, though, are MoneyRates.com’s 10 worst states to make a living for 2012.
Adjusted average income: $33,121
Despite having no state income tax, South Dakota makes this list because its average income is higher only than Mississippi's among the 50 states.
South Dakota is the only newcomer to this year's list of the 10 worst states for making a living, while Oregon was the only state to escape the list since last year, rising to the 13th worst state to make a living in 2012.
Adjusted average income: $32,645
South Carolina makes the list for the second year because of a combination of low income and high unemployment.
Adjusted average income: $32,297
The primary reason West Virginia is on this list for the second year in a row is one of the lowest average income levels in the nation.
Adjusted average income: $31,459
Despite climbing three slots from last year's ranking, California remains on this list due to a combination of high taxes, high cost of living and high unemployment.
Adjusted average income: $31,353
Not all New England states fared badly -- Massachusetts actually made the list of 10 best states to make a living for the second year in a row -- but Rhode Island joins Maine and Vermont on the worst list.
High levels of unemployment and cost of living are the chief problems here.
Adjusted average income: $31,256
Fifth-worst is nothing to be happy about, but Montana did climb a couple spots from last year.
The key problem remains that it has one of the lowest average income levels in the U.S.
Adjusted average income: $31,178
Another state that fell in the rankings despite a slight improvement in its adjusted average income figure, Mississippi dropped four places this year.
As noted above, Mississippi has the lowest average income in the country, and also has one of the highest unemployment rates.
Adjusted average income: $30,433
This state slipped a bit, from fifth-worst last year, despite improving its adjusted average income figure.
The problem is, some of the states around it in the rankings improved their performance even more significantly.
Adjusted average income: $29,703
Another repeater in its position from last year, Maine suffers from a combination of below-average incomes with above-average cost of living.
It also doesn't help that it has one of the highest state tax rates.
Adjusted average income: $22,394
There are plenty of lifestyle perks to living in a warm climate with beautiful scenery, but financially it can be tough going.
Hawaii repeats from last year as the toughest place to make a living, and it isn't even close to losing the spot. At $22,394, Hawaii's adjusted average income figure is more than $7,000 below that of the next lowest state.
The primary problem is that while incomes in Hawaii are about the national average, the cost of living in the state is far and away the highest in the nation.