Average Annual Pay by State 1997 and 1998
The Table shows the 50 states (plus the District of Columbia and Puerto Rico) ranked by 1998 annual average pay. Wyoming and its neighboring states are highlighted. In 1998, Wyoming’s annual average pay of $24,747 placed it 45th out of the 50 states. Many of the neighboring states have rankings similar to Wyoming’s: Montana (50th), South Dakota (49th), Idaho (44th) and Nebraska (41st). The two stand outs in the region were Utah, which was ranked 33rd, and Colorado, which placed 12th. Colorado was the only neighboring state with annual average pay higher than the U.S. average.
Most states, including Wyoming, Idaho and Utah, did not change their ranking from 1997 to 1998. Colorado, however, moved up two places from 14th to 12th. South Dakota’s wages increased enough for it to move up from 50th to 49th, displacing Montana. Nebraska edged up from 42nd to 41st.
Between 1997 and 1998, U.S. annual average pay increased by 5.1 percent. This is well above the 1998 inflation rate of 1.6 percent, suggesting that U.S. workers have experienced growth in real wages. Wyoming’s annual average pay increased 3.7 percent, a growth rate similar to many neighboring states including Montana (3.2%), Idaho (3.3%) and Utah (4.4%). Colorado’s pay increased by 7.3 percent, the second largest increase of all 50 states. South Dakota experienced a 5.1 percent increase in average pay.
What factors affect annual average pay? The lead article notes the importance of the industrial structure of a state’s economy. States dominated by high-paying industries such as Mining or Finance, Insurance & Real Estate (FIRE) will tend to have higher wages than those dependent on low-wage industries such as Agriculture or Retail Trade. A study on 1995 annual average wages across states found that densely populated states with high levels of education tended to have higher wages.1 Interstate differences in cost of living may also affect annual average pay. Many would agree that the top states for wages probably have higher costs for housing and other goods and services. However, accurately measuring interstate cost of living is notoriously difficult.2
1 David Bullard, "How Education and Population Density Affect Average Wages at the State Level," Wyoming Labor Force Trends, March 1997.
2 Jahyeong Koo, Keith R. Phillips and Fiona D. Sigalla, "Measuring Regional Cost of Living," Journal of Business & Economic Statistics, January 2000, pp. 127-136.
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