Why is almost everybody so grumpy about the cost of living?<\/p>\n
A recently updated dataset confirms these inflation anxieties, as rising costs gobble up more of whatever income growth you managed to earn.<\/p>\n
My trusty spreadsheet<\/a> reviewed something economists call \u201creal median household income<\/a>\u201d for the 50 states and the District of Columbia. Simply put, that\u2019s how the Census Bureau each year estimates consumer buying power: what a household makes \u2013 including paychecks, investments and pensions \u2013 after the pain of the national inflation rate gets subtracted.<\/p>\n Before we get going, let\u2019s acknowledge last year\u2019s income norms.<\/p>\n California\u2019s typical household income<\/a> ranked No. 12 among the states in 2025 at $100,800, 15% above the nation\u2019s $87,460.<\/p>\n The highest income was in Massachusetts at $118,500. Lowest? Mississippi at $57,840.<\/p>\n But what\u2019s key isn\u2019t the income level \u2013 it\u2019s how much it has changed.<\/p>\n History lesson<\/p>\n Usually, income growth tops the inflation rate.<\/p>\n First, let\u2019s set checkbook expectations by using a period before we knew what coronavirus was: 1999 through 2019. Those two decades saw a series of economic booms, busts and in-betweens.<\/p>\n Typical incomes in only three states lost ground to inflation during this period: Michigan, where real incomes dropped by an average of $190 per year. Mississippi households lost $160 and Georgia $60.<\/p>\n Typical California households did OK, with after-inflation incomes growing by an average $900 per year \u2013 17th best among the states.<\/p>\n Nationally, the gains were $580 per year, with the biggest winners being households in the District of Columbia, averaging $2,280 gains per year. Then came Massachusetts, up $1,460, and Hawaii, up $1,430.<\/p>\n So, you see how the battle between incomes and inflation usually goes.<\/p>\n Losing ground<\/p>\n The pandemic rearranged the economics of a typical household in numerous ways.<\/p>\n The challenge of keeping incomes ahead of surging consumer prices was a major headache between 2019 and 2025.<\/p>\n Key point: The number of states where household incomes lost ground to inflation during these six years surged to 18, a sixfold increase.<\/p>\n The biggest declines were in the District of Columbia, off $1,330 per year, Connecticut, off $1,170, and Indiana, off $1,110.<\/p>\n Across California, income increases after inflation slipped to $630 per year \u2013 21st highest among the states. Nationally, income growth fell to $360 annually.<\/p>\n The biggest income winners in 2019-25?<\/p>\n Folks in Maine, with incomes after inflation up $2,080 yearly, Colorado, up $2,080, and Montana, up $2,000.<\/p>\n The big shrink<\/p>\n This measurement isn\u2019t perfect, but it tells a story about household cash flows and the challenges consumers face trying to outpace the ever-rising cost of living.<\/p>\n Compare these two eras \u2013 before and after the pandemic. Blame whomever you want, but income growth after inflation shrank for the typical Californian and for Americans in 30 other states.<\/p>\n For Golden Staters, real income growth slipped $260 annually between what it used to be and what\u2019s happened since 2019. Somehow, that was the 22nd-best performance among the states.\u00a0Nationally,\u00a0this dip in income growth ran $220 annually.<\/p>\n These dips may seem like minor losses. But for people on tight budgets, it could be a game-changer. Do not forget we\u2019re talking statistical midpoints. Imagine the fate of those who fall below these measures of typical conditions.<\/p>\n Just think about the biggest drops. The District of Columbia, where income growth fell by $3,610 yearly. Or Hawaii, off $2,130. Or Kansas, off $2,040.<\/p>\n Remember, this sad math ended before 2026 \u2013 when the inflation picture got even uglier.<\/p>\n PS: Who did best among the 18 states where incomes grew after inflation since 2019? Households in Georgia, up $2,020 yearly; Colorado, up $1,940; and Missouri, up $1,560.<\/p>\n Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com<\/a><\/p>\n Try Jonathan Lansner\u2019s Substack collection of economic trends. CLICK HERE<\/a>!<\/p>\n August\u2019s most popular Southern California real estate stories \u2026<\/p>\n No. 1: Where is OC\u2019s hottest homebuying neighborhood? <\/a><\/p>\n No. 2: 338-unit affordable housing complex breaks ground in Tustin <\/a><\/p>\n No. 3: Peek inside this Newport Coast estate that sold for $39M <\/a><\/p>\n No. 4: Enderle Center sold, Campo on 17th moves ahead in Tustin <\/a><\/p>\n No. 5: Rents rise in just 22% of SoCal. See which cities got hikes <\/a><\/p>\n No. 6: Home prices dip in 38% of OC. How did your ZIP do? <\/a><\/p>\n No. 7: LA-OC\u2019s worst-paying jobs: Can those wages pay the rent? <\/a><\/p>\n No. 8: LA-OC homes still \u2018unaffordable\u2019 even with a 0% mortgage <\/a><\/p>\n No. 9: Corona del Mar retail center trades hands, a first in 80 years <\/a><\/p>\n