Money

Middle-class families are earning less in almost every state—here are the few exceptions

American middle-class families are making less money in almost every state. Since 1999, median incomes have dropped nationwide; in Indiana, they've shrunk by more than 9 percent.

That's according to financial website GOBankingRates, which conducted a report using Pew Research Center and United States Census Bureau data, as well as data from real-estate site Zillow, to find the change in median household income in every state. The incomes are adjusted for inflation and the percentages reflect the increase in incomes from 1999 to 2014.

To be considered middle class, you have to earn an annual household income of "two-thirds to double the national median, after incomes have been adjusted for household size," reports Pew. The most recent national household median income estimate was $59,039, according to the U.S. census.

"Although the middle class is shrinking," the GOBankingRates report says, in some places "middle-income families continue to thrive." Here's where the numbers have gone up instead of down:

South Dakota

Median household income of middle-class families: $77,176

Median household income change of middle class: 1.7 percent

"South Dakota has the fifth-highest median household income for middle-class families, and it's where middle-class incomes increased the most between 1999 and 2014," according to GOBankingRates. It's "one of only two states where middle-class incomes actually increased over those years, and it's one of only four states where the proportion of middle income households has increased from 2010 to 2015."

South Dakota residents pay no personal income tax. Its sales tax is  it levies no corporate income taxes, and has no estate tax. As of 2010, its gasoline tax is $0.22 per gallon.South Dakota also has something else going for it besides low taxes --- low unemployment. As of March 2012, the state had an unemployment rate of  well short of the national average, according to the Bureau of Labor Statistics.
Glen Allison | Getty Images
South Dakota residents pay no personal income tax. Its sales tax is it levies no corporate income taxes, and has no estate tax. As of 2010, its gasoline tax is $0.22 per gallon.South Dakota also has something else going for it besides low taxes --- low unemployment. As of March 2012, the state had an unemployment rate of well short of the national average, according to the Bureau of Labor Statistics.

Vermont

Median household income of middle-class families: $75,540

Median household income change of middle class: 0.2 percent

Vermont is the only other state where middle-class incomes have risen; however, it's also "one of the costliest states for an in-state college education," the report finds, with the second-highest in-state tuition and fees in the country, behind New Hampshire.

What's more, "it's also one of the states where it's hardest to save $1 million for retirement."

Burlington, Vermont
Glenn Van Der Knijff | Getty Images
Burlington, Vermont

GOBankingRates also points out that in three other states, the share of middle-income households increased: Mississippi, Oklahoma and West Virginia.

To determine where middle-class incomes have increased, GOBankingRates analyzed the change in median household incomes of middle-class families from 1999 to 2014 and the change in the proportion of households earning middle-class incomes.

Their findings underline the point that where you live matters: Median income and cost of living vary based on what state you're in. If you can't move, though, don't despair. No matter where you're located, living within your means and employing some common-sense budgeting techniques can help you save in the long run. Here are a few simple ways to get started.

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