Indicator 3: Household Income
How Does Massachusetts Perform?
Massachusetts had the 5th highest median household income in the U.S. in 2017 and a higher median income than the average LTS. Massachusetts has seen growth in median household income in every year since 2012, and has recorded 10.8% median household income growth over the 2012-2017 period, during which the U.S. on average grew 9.9%, and the LTS 9.6%. While median household income in Massachusetts has historically grown faster than the U.S. or LTS on average, from 2016-2017 median household income growth was lowest in Massachusetts at 0.6% while the U.S. average grew 2.5% and the LTS grew 3.4%.
Massachusetts has proportionally many more households with incomes above $100,000 than both the LTS and U.S., and less households with incomes below $35,000. This could partly explain why incomes have recovered at a faster rate in Massachusetts than elsewhere, since over the last several decades higher level income households have seen larger gains in household income than the population as a whole. This is largely due to increasing returns to college education and Massachusetts having a high relative proportion of degree holders. As such, the state should see larger income gains than would be experienced elsewhere. New Jersey, another highly educated state, is the only state among the LTS to have a higher median household income than Massachusetts.
Data Source for Indicator 3: U.S. Census Bureau, Bureau of Economic Analysis (BEA)