Americans face a dilemma. The consumer price index rose 7% in December, and while wages have risen recently, they have not, for the most part, kept up with inflation. The median household income in the U.S. dropped 2.9% in 2020 to $67,521, in fact. As The New York Times recently noted, “Only 17 percent of workers say they have received raises that kept up with inflation over the past year, according to a survey of 5,365 adults conducted last month…”
Even as inflation increases the cost of living nationwide, the cost of living is not uniform between states. The state with the lowest cost of living is Mississippi.
While inflation has reached a four-decade high, a record number of Americans have quit their jobs – an average of almost 4 million a month last year – and they appear in no rush to become employed. In addition, some workers have retired because of the COVID-19 pandemic, but quits do not include retirements. Those who quit may believe they can find better-paying jobs. And the labor market is tight. The jobless rate nationwide was 3.9% in December.
National figures, however, can be misleading. In December, according to the Bureau of Labor Statistics, 1.7% of the working population of Nebraska was unemployed. In California, the unemployment rate was 6.5%. Somewhere near the middle was Mississippi, at 4.5%.
Another sharp difference among states is how much people make. Maryland has the highest median household income among states at $86,738. In Mississippi, the poorest state in the nation, the median annual household income is $45,792. (These are the best places to live on a budget of $30k.)
The cost of living in each state tends to match its median household income. When people cannot afford expensive goods and services, prices have to be set to a market that is driven by low wages. It is no surprise, then, that the poorest state, Mississippi, also has the nation’s lowest cost of living.
To find the state with the lowest cost of living, 24/7 Wall St. reviewed the Composite Cost of Living Index for the third quarter of 2021, the most recent available, published by the Missouri Economic Research and Information Center.
Click here to see this is the state with the lowest cost of living
The MERIC study uses an index based on the relative costs of groceries, housing, utilities, transportation, and health care to rank states. Mississippi’s cost of living index was the lowest at 85.1, a figure driven largely by the very low cost of housing there – at 66.4, also the lowest in America. (You can buy a home for under $100,000 in these American cities.)
50. Hawaii
> Cost of living index: 185.6
> Most expensive category: Housing (312.6)
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49. California
> Cost of living index: 146.9
> Most expensive category: Housing (221)
48. New York
> Cost of living index: 143.7
> Most expensive category: Housing (227.5)
47. Massachusetts
> Cost of living index: 132.5
> Most expensive category: Housing (177.8)
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46. Oregon
> Cost of living index: 127.5
> Most expensive category: Housing (169.3)
45. Alaska
> Cost of living index: 125.7
> Most expensive category: Utilities (156.5)
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44. Maryland
> Cost of living index: 121.4
> Most expensive category: Housing (163.6)
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43. Connecticut
> Cost of living index: 119.5
> Most expensive category: Utilities (132)
42. New Jersey
> Cost of living index: 118.3
> Most expensive category: Housing (148)
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41. Rhode Island
> Cost of living index: 115.8
> Most expensive category: Utilities (127.7)
40. Vermont
> Cost of living index: 114.8
> Most expensive category: Housing (135.5)
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39. Washington
> Cost of living index: 112.8
> Most expensive category: Housing (121.6)
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38. New Hampshire
> Cost of living index: 112.6
> Most expensive category: Misc (122.2)
37. Maine
> Cost of living index: 110.9
> Most expensive category: Housing (130.3)
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36. Arizona
> Cost of living index: 107
> Most expensive category: Housing (117.8)
35. Delaware
> Cost of living index: 106.6
> Most expensive category: Grocery (114.1)
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34. Colorado
> Cost of living index: 105.8
> Most expensive category: Housing (117.3)
24/7 Wall St.33. Nevada
> Cost of living index: 103.3
> Most expensive category: Transportation (121.2)
32. Florida
> Cost of living index: 101.5
> Most expensive category: Grocery (107.6)
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31. Utah
> Cost of living index: 101.5
> Most expensive category: Transportation (120.5)
30. Montana
> Cost of living index: 100.8
> Most expensive category: Housing (105.2)
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29. Pennsylvania
> Cost of living index: 100.5
> Most expensive category: Utilities (105.7)
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28. Minnesota
> Cost of living index: 99.6
> Most expensive category: Misc (107.8)
27. Virginia
> Cost of living index: 98.1
> Most expensive category: Health (101.9)
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26. North Dakota
> Cost of living index: 97.8
> Most expensive category: Health (112.6)
25. Idaho
> Cost of living index: 97.1
> Most expensive category: Transportation (117.4)
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24. North Carolina
> Cost of living index: 96.4
> Most expensive category: Health (110.1)
23. South Dakota
> Cost of living index: 96.2
> Most expensive category: Housing (101.6)
22. Wisconsin
> Cost of living index: 95.5
> Most expensive category: Health (111.5)
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21. South Carolina
> Cost of living index: 94.8
> Most expensive category: Utilities (109.9)
20. Kentucky
> Cost of living index: 93.9
> Most expensive category: Transportation (104.2)
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19. Nebraska
> Cost of living index: 93.6
> Most expensive category: Health (102.9)
18. Wyoming
> Cost of living index: 93.6
> Most expensive category: Misc (102.5)
17. Ohio
> Cost of living index: 92.9
> Most expensive category: Grocery (101.4)
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16. Louisiana
> Cost of living index: 92.8
> Most expensive category: Health (99.5)
15. Texas
> Cost of living index: 92.6
> Most expensive category: Utilities (103.9)
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14. Arkansas
> Cost of living index: 92.1
> Most expensive category: Misc (101.8)
13. Michigan
> Cost of living index: 91.4
> Most expensive category: Transportation (103.7)
12. Missouri
> Cost of living index: 91.2
> Most expensive category: Grocery (98)
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11. Indiana
> Cost of living index: 91.1
> Most expensive category: Utilities (102.4)
10. New Mexico
> Cost of living index: 90.6
> Most expensive category: Health (99.3)
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9. Illinois
> Cost of living index: 90.5
> Most expensive category: Transportation (106.3)
8. Iowa
> Cost of living index: 90.3
> Most expensive category: Health (99.3)
7. West Virginia
> Cost of living index: 90.1
> Most expensive category: Misc (98.3)
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6. Tennessee
> Cost of living index: 90
> Most expensive category: Grocery (95.7)
5. Georgia
> Cost of living index: 89.8
> Most expensive category: Misc (97.3)
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4. Alabama
> Cost of living index: 88.6
> Most expensive category: Utilities (101.8)
3. Oklahoma
> Cost of living index: 88.2
> Most expensive category: Utilities (97.4)
2. Kansas
> Cost of living index: 86.9
> Most expensive category: Utilities (101.4)
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1. Mississippi
> Cost of living index: 85.1
> Most expensive category: Health (96)
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