RewardExpert Ranks the Best and Worst States for Low-Income Individuals and Families

The top three best states for low-income individuals and families are:

• Vermont – The state minimum wage of $10.50 is well above the federal minimum and is indexed to inflation. While median monthly rents in Vermont are slightly above the national average, at $966 for a one-bedroom apartment and $1,260 for a two-bedroom, this amounts to approximately one-third of the statewide median income for those who rent, making housing relatively affordable.
• Rhode Island – The overall cost of living index is lower in Rhode Island than in Vermont, and its income tax is somewhat more progressive, offering a larger standard deduction. Rhode Island and Vermont are broadly comparable, both offering an Earned Income Tax Credit that boosts low-income taxpayers’ incomes, and setting their Medicaid eligibility income level at 138 percent of the federal poverty line for both individuals and families.
• New York – With its high cost of living, and especially its high housing prices, it might surprise some that New York comes in as the third most hospitable state for low-income residents. There are several good reasons why this is the case. In the first place, New York has a very progressive tax code. Additionally, the state minimum wage of $10.40 per hour is well above the national average. Also, family medical leave is legally mandated, and the state’s Fair Debt Collection Practices Act not only applies to original creditors, but shields all but 90 percent of a debtor’s wages from creditors.

The bottom three states for low-income individuals and families are:

• Georgia – Low-income families and individuals residing in Georgia have a tough time making ends meet, and little in the way of assistance or protection. The income cutoff for Medicaid is low, with families qualifying for Medicaid only below 36 percent of the federal poverty line and non-disabled individuals without children not qualifying at all with any amount of income. The minimum wage in Georgia is no higher than the federal minimum of $7.25, and the state income tax code is more regressive than anywhere but Alabama.
• Virginia – Low income families and individuals in Virginia struggle with a relatively high cost of living, especially when it comes to monthly housing costs, and get little in the way of assistance. The minimum wage in Virginia is the same as the federal minimum wage of $7.25 per hour, and the median rent for a one-bedroom apartment is $1,044 per month, which amounts to 33.28 hours per week at minimum wage.
• Mississippi – Residents of third-place Mississippi have the lowest median household incomes in the nation and face challenging circumstances, to say the least. Although 24 percent of Mississippians receive health insurance through Medicaid, the state opted not to expand access and eligibility under the ACA. In fact, Mississippi’s Medicaid eligibility threshold is the fifth-lowest in the nation, a mere 27 percent of the federal poverty line for families, while individuals do not qualify if they have any income.

“Achieving financial stability is not an easy task,” says Tyschuk, “Should the opportunity present itself, the upshot is that struggling citizens can relocate to a state in our top ten to search for better opportunities and support that can lead to financial stability.”

RewardExpert analyzed state-by-state data for 22 data indicators falling into seven broad categories:

1. Federal and state government social programs and assistance, such as SNAP benefits and households, Heating and Energy Assistance, Unemployment insurance, etc.
2. Insurance and Medicaid
3. Minimum wages and unemployment rates
4. State laws governing family and/or medical leave and debt collection practices
5. Income tax codes and earned-income credits
6. Housing costs
7. Income and overall cost of living

For further information and to view the full report, visit the RewardExpert website.