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The 10 poorest states in America

Tony Pierce, Special to CNBC

America's 10 poorest states

Duangkamon Khattiya | Photographer's Choice | Getty Images

After the U.S. Census released its data for 2012 U.S. income and poverty, The Economist called the numbers "both grim and unsurprising."

The rich were getting richer, the poor poorer and the unemployment numbers were stagnant.

Even though the country had added 2 million jobs, many states, especially in the South, continued to suffer. Mississippi's median household income, which is the amount of money earned by the household that falls exactly in the middle of the pack of all the other households, was nearly half that of the richest.

Childhood poverty is a big problem for states that are among the poorest. Many have a child poverty rate around 25 percent.

Even more grim is that in 2012, 46.5 million U.S. citizens lived below the poverty line, slightly more than in 2011. That's 15 percent of the country.

Click ahead to see which 10 states are the poorest, by median household income.


—By Tony Pierce, Special to CNBC.com
Posted 27 Sept 2013

10. Oklahoma

Oklahoma City
Anne Rippy | Photographer's Choice | Getty Images

Median household income: $44,312
Population: 3,814,820

More than 630,000 Oklahomans (17.2 percent of the state) last year had incomes below the poverty level, according to the Census Bureau.

African-Americans, Native Americans and Hispanics were twice as likely as whites in Oklahoma to earn less than the poverty level. Only 14.6 percent of Oklahoma whites live in poverty, while 28.8 percent of Hispanics and 29.8 percent of blacks do. Meanwhile, an estimated 45 percent of Oklahoma single mothers with children younger than 18 live in poverty.

On the positive side, employment has increased each year since 2009 and could do the same in 2013. In 2009, the unemployment rate was 7.1 percent, in 2012 it was just 5.3 percent. That number, though, has been flat for a while. Since August of last year, jobless rates have remained unchanged.

9. South Carolina

Columbia, South Carolina
James Robinson | E+ | Getty Images

Median household income: $43,107
Population: 4,723,723

The last few years have been hard on South Carolina. In 2000, 1 out of every 6 South Carolinians was in poverty; in 2012 it was 1 out of every 5. During that time, nearly 300,000 residents fell below the poverty line.

"In the Carolinas, we've lost a lot of textile jobs, which typically employ people with less than a college education," Winthrop University economics professor Laura Ullrich told WBTV recently. "We need to be training more engineers, more mathematicians and more scientists so we're ready for the new high-tech jobs. We want those jobs to come here and not go elsewhere," she added.

That may be a bit of a challenge. South Carolina was ranked 47th in high school graduations. And according to the Children's Defense Fund, only 27 percent of eighth graders can read at an eighth-grade level.

The Palmetto State isn't the best in health either. In many categories, it's just the opposite. South Carolina's adult obesity rate is 31.6 percent. Only 13 states are above 30 percent. It's 47th in low infant birth weight; and 46th in overall health, up from 45th in 2011.

8. Louisiana

Gerard Lodriguss | Photo Researchers | Getty Images

Median household income: $42,944
Population: 4,601,893

If it wasn't for Mississippi and New Mexico, Louisiana would have had the highest percentage of residents living in poverty at nearly 20 percent. The poor are not getting poorer, however, as that 20 percent rate has been sadly consistent over the last decade. Poverty is significantly higher, however, in New Orleans (28.7 percent) and Baton Rouge (26.7 percent).

In regards to the extreme poverty, there were only three other states in 2012 that had a lower percentage of households that earned less than $10,000 than The Pelican State. Extreme poverty occurs when your income is less than half the poverty level.

On the bright side, Louisiana has seen a 4.2 percent increase in the median income over the last dozen years: from $41,227 in 2000 to $42,944 in 2012. However, those numbers are lower for New Orleans residents ($34,361) and those in Baton Rouge ($38,806).

The Crescent City's gross domestic product, though, increased by 7.6 percent in 2012. While GDP was up for a lot of cities across the country, New Orleans netted the ninth-largest increase in the land thanks to an upsurge in mining and natural resources.


7. Tennessee

Nashville, Tennessee
Malcolm MacGregor | Flickr | Getty Images

Median household income: $42,764
Population: 6,456,243

The good news is Tennessee's unemployment rate improved sharply between 2011 and 2012, dropping by 1.3 percent in just a year. The bad news is it has risen during 2013 to 8.5 percent despite the fact that manufacturing is up.

One of the factors hurting the Tennessee economy is the increase in job cuts in the public sector. "When government employment is down 1.4 percent, that's a big sector and that's almost 6,000 jobs right there," David Penn, associate professor of economics at Middle Tennessee State University told the Memphis Business Journal.

Regardless, a quarter of children in Tennessee are living in poverty, a third rely on food stamps, and according to "Kids Count" nearly half of pregnant women in Tennessee don't receive "adequate" prenatal care.


6. New Mexico

Albuquerque, New Mexico
Richard Cummins | Lonely Planet Images | Getty Images

Median household income: $42,558
Population: 2,085,538

New Mexico is the only state ranking among the 10 poorest states not located in the South.

In 2012, 426,000 New Mexicans (20.8 percent of the state population) were in poverty, a six-figure increase from 2000 when the poverty rate was 18.6 percent.

The rise in poverty has hurt the state's already dismal rating for children's well-being. The Land of Enchantment was recently ranked dead last in the latest Kid's Count data book. The state switched places with Mississippi, which last year was the worst.

"I think the whole unemployment issue, the whole issue with poverty and ultimately the issue with the lack of good early childhood programs causes a big mountain that we have to cross," Albuquerque Public Schools Superintendent Winston Brooks told KRQE in June when the rankings were published. "The investment strategy is very simple. If you invest in education, kids' futures, you're going to build the economy."

Local, state and federal government workers make up 23.4 percent of workers in New Mexico due to the state's abundance of federal research labs and health-care facilities. But since September 2010, government employment has dipped about 3 percent, according to the Rocky Mountain Economist. New Mexico already has the second-highest percentage of residents below the poverty level, if the D.C. belt-tightening continues, it could become more grim.

5. Kentucky

Louisville, Kentucky
Josh Rinehults | E+ | Getty Images

Median household income: $41,724
Population: 4,380,415

More than 1 in 4 children in Kentucky lived in poverty in 2012. According to the census numbers, child poverty increased from 23.5 percent in 2008 to 26.5 percent in 2012. Meanwhile total poverty in the Bluegrass State rose from 18.6 percent in 2009 to 19.4 percent in 2012. That has led to an increase in dependence on food stamps. In 2012, more than 18 percent of Kentuckians received food stamps—up from 17.4 percent in 2011.

On the bright side, only Kentucky recorded a decrease in unemployment in August of 2013 (8.4 percent compared with 8.5 percent), but the commonwealth is still 1.1 percent higher than the national average this year.

Ron Crouch, director of research at the Kentucky Education and Workforce Development Cabinet, told Kentucky.com that there appears to be a trend from manufacturing jobs to health-care and education jobs in the state.

Crouch noted that in 2012, 13.6 percent of all jobs in Kentucky were in the manufacturing sector. In 2008, those jobs amounted to 15 percent of the workforce. Likewise, health-care and education jobs accounted for 24.4 percent of employment in 2012 compared with 22.4 percent in 2008.

Another sector that appears to be growing in the state is auto manufacturing. So far in 2013, more than 650,000 vehicles have been produced in Kentucky. Only Ohio and Michigan made more vehicles in the U.S.

According to Business Lexington, Kentucky ranked fifth in 2011 and fourth in 2012 in auto production.

4. Alabama

Birmingham, Alabama
Sean Pavone | Flickr Open | Getty Images

Median household income: $41,574
Population: 4,822,023

Gallup ranked Alabama the second most religious state in the U.S. earlier this year, but the state clearly has issues with moderation. Not only is it poor but it's tragically unhealthy. In statistics presented at the 14th Annual Rural Health Conference, The Cotton State leads the nation in diabetes, is second in obesity and third in hypertension.

Things are just as bad for its youth. Only two other states have a worse ranking for children living in poverty and infant mortality.

Over the last seven years, the median income in Alabama was consistently $10,000 or more below the country's average. Only Mississippi ranked worse than Alabama in credit card delinquency in 2012, according to TransUnion, and that dubious title remained consistent through the first two quarters of 2013.

The editorial board of The Anniston Star in June blamed the lawmakers. "Alabama likes to run its government on the cheap, and we've got the bad infrastructure, loose regulations and weak social safety net to prove it," it wrote in an editorial.

The Public Affairs Research Council, using estimates from The Institute on Taxation and Economic Policy, said: "The lowest 20 percent of income earners in Alabama pay more than 10 percent of their incomes in state and local taxes. In contrast, the top 1 percent of earners in Alabama pay just 3.8 percent of their income in state and local taxes."

This is in part because Alabama relies heavily on sales taxes as a way to raise revenue due to the fact the state has the lowest property tax in the nation.

3. West Virginia

Charleston, West Virginia
Henryk Sadura | Getty Images

Median household income: $40,196
Population: 1,855,413

More than 320,000 West Virginians lived in poverty in 2012, including nearly 90,000 children. Although those below the poverty line decreased by nearly a full percentage point compared with 2011, nearly 1 out of every 5 residents in the state lived in poverty and almost 10 percent of the state lived in extreme poverty.

Last year was especially tough for African-Americans in West Virginia. At 37.4 percent, their poverty rate was nearly 20 points higher than the state average (17.8 percent).

"It's been five years since the recession, and too many West Virginians remain living in poverty," Sean O'Leary, fiscal policy analyst with the West Virginia Center on Budget and Policy, said in a statement. "State leaders need to think of these families and their children when setting the state's priorities."

Even though the median income in West Virginia increased by about $900 in 2012, the overall increase over the last three years is a stagnant 0.31 percent. Nearly 60 percent of West Virginians made less than $50,000 in 2012.

2. Arkansas

Hot Springs, Arkansas
Ionas Kaltenbach | Lonely Planet Images | Getty Images

Median household income: $40,112
Population: 2,949,131

Arkansas is starting to regain some traction that it lost post-recession. For the first time since 2008, the state's median household income crept above $40,000, rising to $40,112 from $38,758 last year.

The gains in income came even as the state's agriculture sector was hurt by a devastating drought. While beef cattle production was down all throughout the nation, nowhere was more affected than Arkansas, which saw beef production fall 6 percent, double that of the national percentage.

Real estate, especially expensive homes, also were hit hard. According to Arkansas Business, only 13 houses sold for more than $1 million last year in the state's wealthiest county. In 2011, only 22 homes were sold for more than seven figures.

Arkansas' poverty rate was 19.8 percent, which put it at the fourth-highest behind Mississippi, New Mexico and Louisiana—and just ahead of Kentucky.


1. Mississippi

Jackson, Mississippi
SuperStock | Getty Images

Median household income: $37,095
Population: 2,984,926

The Magnolia State is the poorest in the USA with a median household income of just $37,095. (Nearly half that of the richest state, Maryland). Despite adding 25,000 jobs in 2012, Mississippi's unemployment percentage ranks the sixth highest. More than 1 out of 3 children are poor, with 24.2 percent of its citizens living below the poverty line, the highest in the land according to the Census Bureau.

Only West Virginia had fewer households earning over $200,000 last year than Mississippi. And only Oregon had more people receiving food stamps.

The slightly good news is that the state's GDP increase is the best in the U.S. at 1.9 percent (the national average is 1.6 percent). According to the AP, Darrin Webb, Mississippi's state economist, recently told the state's Joint Legislative Budget Committee that although "It appears we are outpacing the nation in 2013, especially in the area of job growth," he expects that GDP increase to settle down to 1.8 percent by the end of the year. Webb said many of the new jobs created in 2013 are low paying and/or part-time employment.

Residents aren't taking it lying down. In 2012, Mississippi went to the polls more than any other state. Over 73 percent of residents voted in the 2008 election.


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