In this article, we will discuss the 20 States with the Lowest Poverty Rates in the US.
Poverty and Wealth in the US
The United States is the ‘land of opportunities’ for those who have the skill and the discipline to achieve something big in life. According to the US Census Bureau 2022 data, the poverty rate in the US was around 11.5%, with 37.9 million people living in poverty. Neither the poverty rate nor the number of poor people significantly differed from 2021. The poverty rate in the US has continued to decline steadily over the last decade. Almost 11.2% of the people living in the US were below the poverty line, $27,479 for a family of four, in 2021, compared to 14.8% in 2011. Over the past 53 years, the poverty rate has declined by more than half. In 1959, the poverty rate was recorded between 22-23%.
In terms of demographics, the US communities that are most affected by poverty are the Native Americans, African Americans, and Hispanics. The US Census Bureau also measures the data based on non-cash benefits, known as supplemental poverty measure (SPM). In 2022, the SPM rate was around 12.4%, a rise of almost 4.6 percentage points from 2021. Moreover, the SPM child poverty rate more than doubled, from 5.2% in 2021 to 12.4% in 2022. Despite an increase in SPM, the US Social Security continued to help fight against poverty, moving 28.9 million people out of SPM poverty. Whereas, refundable tax credits helped 6.4 million people to move out of SPM poverty in 2022.
The wealth status of people in the US is quite better compared to most of the richest countries in the world. The US is one of the strongest economies in the world. According to the UBS Global Wealth Report 2024, the wealth growth in the US between 2010 and 2023 was a staggering 121%. In 2023, the average wealth of an adult in the US was around $564,862. Over 44% of the top 1% of wealth is accumulated in the US and Canada. There are around 22 million millionaires in the US, which is expected to increase to 25.4 million in 2028. Some of the richest states in America are also the states with the lowest poverty rates in the US.
One major reason why poverty rates are low in some states compared to others is the significant corporate presence in these states that provides job and economic opportunities. This factor also reflects that the US has one of the most competitive job markets in the world.
The Top Digital Payments App in the US
One of the top financial firms based out of the US, PayPal Holdings, Inc. (NASDAQ:PYPL) operates in over 200 countries worldwide. PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the initial traditional fintech companies that began the Bitcoin payment option. Users can buy, transfer, and sell cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. PayPal Holdings, Inc. (NASDAQ:PYPL) has its stablecoin, PayPal USD (PYUSD). On May 29, the company announced that PYUSD is available on the Solana blockchain, making PayPal’s stablecoin faster and cheaper to use. The presence of PayPal USD on Solana provides options for users to access multiple blockchains giving increased flexibility and control. According to Coinbase, around 58% of Americans say they have heard of Bitcoin. Considering the increasing demand for cryptocurrencies, PayPal Holdings, Inc. (NASDAQ:PYPL) is growing its presence in the market.
The company has lately gone out of favor with investors due to concerns about market competition and some questionable capital allocation decisions by the previous management. However, things seem to be getting better under the new CFO, Alex Chriss. PayPal Holdings, Inc. (NASDAQ:PYPL) during Q1 2024 posted strong outcomes with an EPS of $1.40, surpassing analyst estimates by $0.18. The fintech giant made notable progress driven by improved transaction margins, expense discipline, and optimal marketing spending. In addition, the rise in interest income also played a key role during Q1. The company’s revenue was reported at $7.7 billion, beating estimates by $182.74 million.
Now, during Q2 2024, PayPal Holdings, Inc. (NASDAQ:PYPL) is expected to increase its total payment volume from $403.9 billion in Q1 2024 to $418.1 billion in Q2 and $376.5 billion year-over-year. According to Visible Alpha estimates, the total active accounts should reach 427 million, in line with Q1. The first half part of the year is over, and now PayPal should have a better idea of how 2024 is heading forward. Wall Street analysts expect the company to improve its outlook for 2024, with full-year adjusted EPS at $4.16, up from the company’s guidance of $3.83 in April 2024.
PayPal Holdings, Inc. (NASDAQ:PYPL) is also one of the best undervalued stocks to buy according to Reddit, trading almost 14 times its forward earnings. The EPS growth rate for the next year is around 10%, as of July 30. According to analyst consensus, the stock has an average price target of $75, which implies an upside of 27%.
Copyright: vikalipa / 123RF Stock Photo
Our Methodology
We have gathered data for the poverty rates by state from the US Census Bureau, as of 2022. This is the latest official data available on the subject. The states with equal poverty rates are ranked based on the 10-year percentage change in poverty rates. The list of states with the lowest poverty rates is ranked in descending order of their poverty rates as of 2022.
20 States with the Lowest Poverty Rates in the US
20. Nebraska
Percent Below Poverty Level (2022): 11.20%
The poverty rate in Nebraska was around 12% in 2017 and 13% in 2012. An estimated 230,000 Nebraskans are lifted above the poverty line each year through the federal and state safety net programs. Nebraska ranks 20th among the states with the lowest poverty rates in the US.
19. Alaska
Percent Below Poverty Level (2022): 11%
Even though the poverty rate in Alaska has increased from 10.10% in 2012 and 10.20% in 2017, it still makes it to the states with the lowest poverty rates in the US. Over the past 10 years, the poverty level has risen by nearly 8%.
18. Iowa
Percent Below Poverty Level (2022): 11%
Around 11% of people live below the poverty level in Iowa, as of 2022. In the last 10 years, the poverty rate has reduced by nearly 13.4%. In addition, through the federal and state safety net programs, an estimated 410,000 people in the state are lifted above the poverty line each year.
17. Rhode Island
Percent Below Poverty Level (2022): 10.80%
Rhode Island’s poverty rate was recorded at 10.80% in 2022. With a reduction of 23% in the poverty rate in the last 10 years, Rhode Island ranks 17th among the states with the lowest poverty rates in the US.
16. Maine
Percent Below Poverty Level (2022): 10.80%
Maine is tied to Rhode Island on poverty rates but experienced a higher reduction in poverty levels in the last 10 years, around 26.5%. That’s why it ranks 16th among the states with the lowest poverty rates in the US.
15. Wisconsin
Percent Below Poverty Level (2022): 10.70%
The poverty rate in Wisconsin has dropped from 12.30% in 2017 and 13.20% in 2012. Wisconsin has improved its economy over the years and has made progress in reducing poverty.
14. Idaho
Percent Below Poverty Level (2022): 10.70%
Idaho’s poverty rate has dropped by a staggering 32.7% from 2012. In 2017, the poverty rate was around 14.50% and now it is 10.70%. The federal and state safety net programs lift an estimated 280,000 people above the poverty line each year, making it one of the top states with the lowest poverty rates in the US.
13. Virginia
Percent Below Poverty Level (2022): 10.60%
Virginia is next on the list with a poverty rate of 10.60%. The poverty rate has dropped from 11.20% in 2017. Virginia ranks 13th among the states with the lowest poverty rates in the US.
12. Vermont
Percent Below Poverty Level (2022): 10.40%
Vermont’s poverty level was around 11.40% in 2017 which dropped to 10.40% in 2022. With a 10-year reduction of 11.90%, Vermont is one of the states with the lowest poverty rates in the US.
11. Massachusetts
Percent Below Poverty Level (2022): 10.40%
Just like Vermont, Massachusetts has the same poverty rate. However, Massachusetts has improved its poverty rate by 12.60% from 2012.
10. Hawaii
Percent Below Poverty Level (2022): 10.20%
Hawaii has a slightly lower poverty rate compared to Massachusetts. Various government programs and community interventions assist in reducing poverty and support low-income families. Hawaii has improved its poverty by almost 12% from 2012.
9. Washington
Percent Below Poverty Level (2022): 10%
Washington is one of the states with the highest poverty reduction over the last 10 years. Between 2012 and 2022, Washington has reduced its poverty rate by almost 26%.
8. Connecticut
Percent Below Poverty Level (2022): 9.80%
The US Census Bureau recorded Connecticut’s poverty rate at 9.80% in 2022. Poverty in the state dropped by just under 9% from 2012. Connecticut ranks eighth among the states with the lowest poverty rates in the US.
7. New Jersey
Percent Below Poverty Level (2022): 9.70%
New Jersey has a poverty rate of 9.70%, as of 2022. In 2017, the poverty rate of the state stood at 10.70% in 2017 and 10.80% in 2012.
6. Maryland
Percent Below Poverty Level (2022): 9.60%
Maryland has reduced its poverty rate by 6.8% since 2012. Maryland is not only one of the states with the lowest poverty rates but it is also one of the wealthiest states in the US.
5. Minnesota
Percent Below Poverty Level (2022): 9.60%
Minnesota has a poverty rate of 9.6%, as of 2022. The poverty rate has dropped from 11.40% in 2012, with a percentage change of almost 15.8%.
4. Delaware
Percent Below Poverty Level (2022): 9.40%
Delaware is also among the wealthiest states and has reduced its poverty rate by almost 22% from 2012. Delaware ranks fourth among the states with the lowest poverty.
3. Colorado
Percent Below Poverty Level (2022): 9.40%
Colorado had a poverty rate of 9.40% in 2022, dropping from 11.5% in 2012 and 13.7% in 2012. Colorado also has one of the lowest personal income tax rates in the US, at 4.40%.
2. Utah
Percent Below Poverty Level (2022): 8.20%
In the 10 years between 2012 and 2022, Utah recorded the highest reduction in the poverty rate by almost 36%. Utah ranks second among the states with the lowest poverty rates in the US.
1. New Hampshire
Percent Below Poverty Level (2022): 7.20%
New Hampshire has the lowest poverty rate in the US. The state had a poverty rate of 8.10% in 2017. In 2012, the poverty rate was around 10% and has dropped by 28% in 2022 to 7.20%. In addition, New Hampshire’s percentage of people 65 years and above had a poverty rate of 7.9% in 2022. New Hampshire has one of the lowest personal income tax rates in the US, which is around 3%. New Hampshire has no state sales tax and has the third lowest state tax burden. New Hampshire ranks first among the states with the lowest poverty rates in the US.
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