The Best and Worst States for Low-Income Individuals and Families

The state that is worst for its low-income residents is 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 in Georgia is even lower than in Virginia, 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. While Georgians’ average SNAP benefit is above the national average, at $257.46 per month, the number of qualifying households and the total amount of benefits paid are falling precipitously. 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: while the lowest tax rate is only 1 percent, the top tax rate of 6 percent kicks in well below the poverty line, at $7,000 annual income for individuals and $10,000 for married couples.

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. As a state that opted not to expand access to Medicaid, non-disabled individuals do not qualify if they have any income at all, while families must make less than 38 percent of the federal poverty line to qualify (less than $7,896 per year). The only bright spots here are a relatively low unemployment rate of 3.5 percent and an earned income tax credit amounting to 20 percent of the federal EITC amount.

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. As a result, 12 percent of Mississippi residents are uninsured, and those low-income Mississippians who do receive Medicaid struggle to make ends meet, even if they receive SNAP benefits. Adding insult to injury, only 87.1 percent of residents report being allowed to pay their rent in cash, exposing low-income Mississippi residents to further housing insecurity.

Aside from a low cost of living and low median monthly rents, Kansas shows little love for its low-income residents. As with the majority of the worst states for low-income individuals and families, the minimum wage in Kansas is the same as the federal minimum of $7.25 per hour, with a Medicaid eligibility threshold well below what even minimum wage employees earn (38 percent of the federal poverty line for families with children). Likewise, state law does not provide for family medical leave: parents can be fired for simply leaving work to pick up a sick child at school. The only bright spots to be found are a Fair Debt Collection Practices Act that prevents creditors from seizing a debtor’s vehicle (worth up to $20,000) and a state Earned Income Tax Credit of 17 percent of the amount of the Federal EITC.

Fifth-place Missouri presents a mixed picture. Low housing costs (median monthly rent for a two-bedroom apartment in Missouri is $844) make it easier to get by on minimum wage earning, and a below-average cost of living index makes above-average SNAP benefits ($257.23 per month) go further. On the other hand, Missouri’s Medicaid income cutoff is a ridiculously low 22 percent of the federal poverty line, and its income tax code is particularly regressive for married couples, with a top tax rate of 5 percent that kicks in at an absurdly low annual income of $9,000 for individuals and couples alike.

Sixth-place Alabama has the dubious distinction of having the most regressive income tax (with a top tax rate kicking in at incomes as low as $3,000 per year for individual filers and $6,000 for married couples). Alabama has the lowest (tied with Texas) Medicaid income ceiling—18 percent of the federal poverty level for families. While housing costs are among the lowest in the nation, Alabama has the third-lowest rate of rental units for which cash is an acceptable form of payment. Alabama is also quite stingy when it comes to social safety net programs, with average Temporary Assistance for Needy Families and unemployment insurance benefit amounts well below the national average, at $213 per month and $220 per month.

Wyoming comes in seventh place, primarily as a consequence of its having no state income tax and a relatively low cost of living index (65.56). While rents are below average, with a median asking rent of $606 for a one-bedroom and $779 for a two bedroom apartment, an above average 9.5 percent of apartment rents cannot be paid in cash. Like Georgia, SNAP benefits are above average at $263.04 per household, but are falling fast. Benefits for recipients of social welfare programs in the state are respectable, however, affordable housing is difficult to come by, and residents receive less government assistance than anywhere else (except for Indiana), with Section 8 housing vouchers covering only an average of $4,833 per year per household.

There is literally only one bright spot for low-income individuals living in South Carolina: the state does have a very strong Fair Debt Collection Practices Act that shields 100 percent of wages and up to $5,000 in liquid assets from debt collections. In all other areas, low-income residents of South Carolina have a rough time of it: the state minimum wage is the same as the federal minimum, and the state’s income tax code is structured to benefit the wealthy. South Carolina is rather stingy about social safety net programs, with unemployment benefits extending on average a mere 18 weeks, and average TANF benefits are $165 per month. Furthermore, South Carolina opted to not expand Medicaid access, but maintains a relatively reasonable eligibility threshold for families with children: a family of three making less than $13,922 would be eligible.

Florida also lacks a state income tax, which benefits residents of all income levels. Florida is one of the few states that has seen a net increase in households receiving food assistance through SNAP, although the average benefit amount of $221.05 per month is below the national average of $241.99 per month. And while the Medicaid income cutoff is an abysmal 33 percent of the federal poverty line for families, Florida does have an unusually strong Fair Debt Collection Practices Act that applies to original creditors and shields 100 percent of wages from creditors.

Rounding out our list at number ten is Tennessee. Like many of the states to grace our bottom ten, one of the only bright spots is a low cost of living and housing costs that are within reach for low-income residents and minimum wage workers. Unfortunately, like many of our bottom ten states, the state does not have a minimum wage above the federal minimum of $7.25 per hour. Again, like many of our bottom ten states, Tennessee is quite stingy when it comes to social program benefits, with TANF recipients in the state receiving an average monthly benefit of only $166. And, while Tennessee does have a state-funded rental assistance program, it is only available for families with children, those at imminent risk of homelessness, or those with mental health issues, and average benefits come out to only $264 per month.