Why Is Louisiana Income 4th Lowest In the Nation?

LOUISIANA (KPEL News) - Louisiana’s place near the bottom of WalletHub’s 2025 “States Where People Have the Highest Income” list may surprise those who associate the Pelican State with booming energy and tourism sectors. Scoring just 19.83 out of 100 and ranking 48th nationwide (50 states plus D.C.), Louisiana’s income figures reveal a deeper economic struggle: while a small share of residents earn six-figure salaries, the vast majority face stagnant wages that lag well behind national norms. Understanding where Louisianans stand in terms of earnings—and why many struggle to keep up with everyday costs—offers crucial insight into the state’s long-term economic challenges.

Income Distribution in Louisiana

• Top 5 Percent Earners: $405,592 per year (adjusted for cost of living)
• Median Household Income: $58,352 (adjusted for cost of living)
• Bottom 20 Percent Earners: $11,733 per year (adjusted for cost of living)

Although Louisiana’s top 5 percent incomes are sizeable, they lag states like Texas ($504,383) or California ($473,848). Likewise, the state’s median household income of $58,352 falls well below the national median of approximately $81,000. For those in the bottom 20 percent—earning just $11,733 annually—day-to-day expenses can be especially challenging.

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How Louisiana Compares to Neighboring States

Texas, ranking 11th, clearly outpaces Louisiana across all three tiers, particularly with a median household income nearly $15,000 higher than Louisiana’s.

Alabama sits two spots above Louisiana at 45th, with a slightly higher median income ($57,774) and bottom-20 percent income ($13,818).

Mississippi trails Louisiana by one rank (49th) in overall score, but its bottom 20 percent earners have marginally higher incomes ($12,515) compared to Louisiana’s bottom 20 percent ($11,733).

What Drives Louisiana’s Low Ranking?

• Economic Structure & Wage Growth

  • Many of Louisiana’s major industries—oil and gas, manufacturing, and hospitality—tend to have lower average wages than tech, finance, or specialized services.
  • Historical data show slower per-capita income growth compared to Sun Belt and Northeast states with booming tech or finance hubs.

• High Cost Burden on Essentials

  • Louisiana households spend a larger share of their budgets on necessities. For example, the average Louisianan spends about 2.39 percent of income on groceries—higher than many peers—so lower incomes stretch even less when covering food, healthcare, and housing costs.
• Income Inequality & Social Mobility

The gap between Louisiana’s top 5 percent and bottom 20 percent earners highlights persistent inequality. Without targeted workforce development or industry diversification, climbing beyond lower-income brackets remains difficult for many residents.

Implications for Louisianans and Policy Recommendations

• Workforce Development & Education: Expanding access to higher-paying fields—like advanced manufacturing, tech, and renewable energy—can help boost median wages. Increasing state funding for community colleges and vocational training is key.
• Economic Diversification: Incentivizing new industries (e.g., technology startups or clean energy firms) to set up operations in Louisiana could create well-paying jobs beyond traditional sectors.
• Cost-of-Living Relief: Strengthening programs that assist low-income families (housing subsidies, food assistance, childcare support) will help ease financial strain for those in the bottom 20 percent.

By prioritizing targeted education, diversifying the state’s economic base, and mitigating the high cost burden on essential goods, Louisiana can work toward closing the income gap with national peers.