Purchasing power has declined across every U.S. state since 2020, as the cost of everyday spending has increased faster than incomes, according to a new analysis. The findings suggest that many Americans are experiencing a real financial squeeze despite nominal income growth in recent years.
The study, conducted by Wing Assistant using inflation-adjusted data from the U.S. Bureau of Economic Analysis, compared changes in real personal income with real personal consumption expenditures across all 50 states. The results show that purchasing power nationwide has fallen by 12.5 percent since 2020, reversing much of the modest improvement seen in earlier decades.
California recorded the largest decline, with purchasing power falling 18.4 percent since 2020. After accounting for everyday spending, Californians had about $18,667 per person remaining in 2024, roughly 16 percent less than in 2020.
New York ranked second with purchasing power down 17.2 percent over the same period. By 2024, residents had $19,126 per person left after expenses, around 15 percent lower than in 2020. Analysts note that rising housing and service costs in major metropolitan areas may be contributing to the sharper decline.
Illinois placed third, with purchasing power dropping 16.9 percent since 2020. After covering daily spending, residents had about $13,910 per person remaining in 2024, approximately 21 percent less than in 2020.
Pennsylvania ranked fourth, where purchasing power declined 16.7 percent over the period. Residents had $11,418 per person left after expenses in 2024, representing about 29 percent less than in 2020, one of the largest declines in remaining disposable income.
Massachusetts rounded out the top five states with the steepest losses, recording a 15.5 percent decline in purchasing power since 2020. Despite relatively high incomes, residents had $21,661 per person left over after expenses in 2024, roughly 12 percent lower than in 2020.
Other states in the top ten for largest declines include Alaska, Rhode Island, Georgia, and New Jersey. Idaho and Kansas tied for tenth place, with purchasing power falling 13 percent in both states.
In contrast, several states experienced much smaller declines in purchasing power during the same period.
Wyoming recorded the smallest drop, with purchasing power down only 1.2 percent since 2020, far better than the national average. After everyday spending, residents were left with $26,934 per person in 2024, the highest remaining amount among all states and about 30 percent higher than in 2020.
South Dakota ranked second, with purchasing power down 3.7 percent since 2020. Residents still had $21,599 per person left after expenses in 2024, about 19 percent higher than in 2020.
Oklahoma ranked third with a 5.5 percent decline in purchasing power. After expenses, residents had $17,389 per person remaining in 2024, roughly 15 percent more than in 2020.
Connecticut and Arkansas completed the top five states with the smallest declines. Connecticut recorded a 5.6 percent drop, while Arkansas saw a 6.1 percent decline, both significantly better than the national average.
Other states with relatively limited declines include Iowa, Texas, Nebraska, Utah, and Tennessee, each experiencing drops of less than nine percent since 2020.
Roland Polzin, founder of Wing Assistant, said the data highlights a widespread imbalance between income growth and rising costs.
“The data clearly shows spending is rising faster than incomes, and although that pressure is widespread, in some states it’s even higher,” Polzin said. “Once everyday costs are covered, the gap becomes hard to ignore.”
Polzin noted that the difference between states can be dramatic. “In Wyoming, households are left with nearly $27,000 per person after expenses, compared with closer to $11,000 in states like Pennsylvania or Georgia,” he said.
He added that this gap has real consequences for households. When less income remains after bills are paid, families may delay major purchases, reduce discretionary spending, and become more vulnerable to unexpected costs.
The study underscores how rising living costs have reshaped household finances across the country, leaving many Americans feeling that their paychecks do not stretch as far as they once did.