The latest: The typical Massachusetts household earned $131,675 annually over the 2020-2024 period, a 4.1 percent increase from 2015-2019 after adjusting for inflation, according to Census Bureau statistics released Thursday.
Up in New Hampshire, the median household income rose 5.1 percent to $122,715, while down in Little Rhody, it climbed 6.2 percent to $112,375. Nationally, the gain was 5.5 percent to $99,999.
Why it matters: The income data — five-year averages from the Census Bureau’s ongoing American Community Survey — offer both a warning about Massachusetts’ competitiveness and an explanation of why affordability is a pressing issue even in an affluent state.
Massachusetts has prospered with an economy built around highly educated and highly paid workers — medical researchers, software engineers, financial analysts, and professional services providers.
Slowing income growth relative to other states may signal that Massachusetts is losing ground. Job growth has declined and unemployment has risen as tech, life sciences, and commercial real estate come under increasing pressure. Meanwhile, steep housing, energy, and child care costs are taking an outsize bite from earnings.
All this helps explain why nearly 150,000 more people left Massachusetts from 2020 to 2024 than arrived from other states, according to Census survey data released earlier in the week. New Hampshire picked up more than 20,000 Bay State exiles, while Rhode Island added 11,500.
The Massachusetts population grew solely from international immigration.
The big picture: What’s behind this paradox of big paychecks but slow growth?
- COVID triggered a significant outmigration as city dwellers sought more space at lower prices. Massachusetts lost a lot of college-educated workers with good salaries in 2021 and 2022, according to Boston Indicators, the research group of the Boston Foundation. Far more were ages 25-44 than 65 or older.
- The state’s economy has underperformed. From 2020 to 2024, Massachusetts’ private sector per capita real gross state product grew by 11.9 percent, trailing the national average of 13.3 percent, according to a 2025 report by the Pioneer Institute. Massachusetts was even farther behind Florida (17.2 percent), Texas (15.9 percent), and New Hampshire (14.8 percent).
- It’s simply harder for Massachusetts incomes to expand quickly because they are already so high. Arizona and Idaho, starting from much lower bases, topped the list of rising incomes, both increasing 11.5 percent over the five-year period.
The bright side: Massachusetts incomes are expanding faster than those of some other wealthy states.
These include New Jersey, which saw a 1.3 percent increase over the 2020-2024 period, Maryland (up 1.1 percent), and Connecticut (down 0.35 percent).
However, California, Washington, and Colorado, each with median household incomes relatively close to Massachusetts, posted strong growth of 7.3 percent, 8.6 percent, and 9.3 percent, respectively.
Final thought: Massachusetts depends heavily on income tax revenue from high earners. The surcharge on incomes above $1 million alone accounted for nearly 7 percent of total tax revenues.
If high earners continue leaving for lower-tax states, that has implications for funding schools, transit, and the social safety net.
Maura Healey and the Legislature have pushed to improve affordability by reducing short-term capital gains taxes, expanding child tax credits, raising the estate tax exemption, passing a $5 billion housing bond bill, and boosting spending on child care.
On the competitiveness front, she signed the Mass Leads Act to boost climate tech and life sciences, shifted to single-sales-factor corporate tax apportionment, and proposed energy reforms.
But with other states hot on Massachusetts’ heels, there is a lot more that needs to be done.
Daigo Fujiwara-Smith and Neena Hagen of the Globe staff contributed data analysis for this story.
Larry Edelman can be reached at larry.edelman@globe.com.