Despite chronic bad news about luring new businesses and higher-salary jobs to their state, Vermonters finally have something to feel good about: The Green Mountain State has been ranked in the top 10 best states for middle-class aspirations.
In a new study, the national research firm SmartAsset placed Vermont at No. 7 in its annual 50-state survey of where best to live out the American Dream.
In the “Best States for the Middle Class – 2019 Edition” study, Vermont bested its neighboring Northeastern states when it comes to living the 21st century’s version of the traditional American life. No Vermont community made it to the top 10 of SmartAsset’s companion study titled “Most Livable Cities in the U.S. – 2019 Edition,” however.
Vermont appears to be more like a Midwestern state than a New England state, at least when it comes to those middle-class hankerings. Six of the top 10 states in the study are located in the Midwest: Indiana, Iowa, Minnesota, Nebraska, South Dakota and Wisconsin.
Livin’ the dream — more equally
Researchers behind the study defined the “American Dream” as consisting primarily of homeownership and financial independence.
Seven metrics were used in the study: Percentage of households in the middle class, median household income adjusted for the cost of living, five-year change in median household incomes, the median home value, the homeownership rate, the Gini coefficient and five-year middle-class job growth.
According to Stephanie Horan, a SmartAsset mortgage, savings and retirement expert, many residents in Vermont are homeowners.
“Census estimates show that owners live in 72.23% of the occupied housing units in the state, the second-highest percentage for this metric,” she wrote. “Vermont also has the eighth-lowest measure of income inequality, with a Gini coefficient of 0.45, and the seventh-highest middle-class job growth from 2014 through 2018, at 30%.”
The Gini coefficient — also known as the Gini index or Gini ratio — is a statistical means economists use to measure income or wealth distribution on a national level. It also shows up income inequality when running the numbers. The complex mathematical method was created by its namesake, the Italian statistician Corrado Gini, in 1912.
“Middle class families, who typically dream of taking out a mortgage to buy a home and elevating their station in life, are the backbone of America,” Horan stated. “ … The middle class is generally defined as households with incomes between two-thirds to double that of the national median household income. As a result of data availability, we defined middle class as households earning between $35,000 and $100,000 for the purposes of this study. … There are wide ranges across many of the metrics we considered. The percentage of households in the middle class ranges across the study from 31% in the District of Columbia to 49% in Idaho. The median home value ranges from $121,300 in West Virginia to $631,700 in Hawaii.”
The top 10 middle-class states
As taken from the study, here’s how Vermont stacked up against other top 10 best middle-class states:
1. Utah
Utah ties for the third-highest percentage of households falling within the middle class. Approximately 47.3% of households in Utah made between $35,000 and $100,000 in 2018, suggesting that the middle class is stronger within the state than in many other places in the U.S. Utah has the lowest measure of income inequality of any state, with the lowest Gini coefficient. The Gini coefficient is a statistical measurement of wealth distribution using a scale of zero to one, where zero represents total equality and one represents total inequality across groups. The Gini coefficient in Utah was 0.43 in 2018. For comparison, the District of Columbia had the highest Gini index, at 0.52.
2. Idaho
Idaho has the largest middle class of any state and has seen the largest increase in middle class jobs. In 2018, 48.8% of households had annual incomes between $35,000 and $100,000, which is 1.5% more than in Utah. SmartAsset defined middle class jobs as those with average earnings between $30,000 and $70,000. Between 2014 and 2018, there was an increase of 44.71% in jobs in Idaho with average earnings in range.
3. Iowa
Iowa ranks in the top 10 across all states for four individual metrics: percentage of households in the middle class, median home value, homeownership rate and Gini coefficient. In 2018, about 47% of households in Iowa made between $35,000 and $100,000 and the median home value was $152,000. Additionally, homeownership rates were high, with owners living in 71.28% of occupied housing units, and the Gini coefficient, which is a measure of income inequality, was 0.44.
4. Nebraska
Nebraska ranks in the top half of all states in all but two of the metrics we considered and does particularly well for percentage of households in the middle class, 46.4%, and Gini coefficient, 0.45. Additionally, homes in Nebraska are relatively inexpensive. The 2018 median home value was $161,800, the 11th lowest of any state. Despite this, however, homeownership rates are relatively low. Owners live in only 66.06% of occupied housing units were owner-occupied, ranking in the bottom half of all states for this homeownership metric.
5. Indiana
Homeownership is often characterized as the cornerstone of middle-class life in America. Owning a home may be more feasible in Indiana than in many other states. In 2018, the median home value was $147,300, the lowest of any state in the top 10 and fifth-lowest overall.
6. South Dakota
South Dakota takes sixth place in the study on the best states for the middle class. It ranks second overall for the percentage of households in the middle class, at 48.7%. Median household incomes in South Dakota remained relatively flat in the five-year period from 2014 through 2018, increasing by only 10.39%. Furthermore, South Dakota has top-20 rates for median home value, homeownership rate and five-year middle-class job growth.
7. Vermont
Many residents in Vermont are homeowners. Census estimates show that 72.23% of occupied housing units are lived in by their owners, the second-highest percentage for this metric of any state. Vermont also ranks eighth overall for its Gini index – at 0.45 – and seventh overall its middle-class job growth from 2014 through 2018 – at 30%.
8. Montana
Median household incomes in Montana increased by 19.43% from 2014 through 2018, the most of any state in the top 10 and fourth-highest percentage overall. Montana ranks sixth overall for its percentage of households in the middle class, at 46.9%. Additionally, it has top-20 rates for homeownership rate, Gini index and five-year middle-class job growth.
9. Wisconsin
Wisconsin ranks in the top half of all states in all but one of the metrics considered, middle class job growth. From 2014 through 2018, there was an increase of only 9.12% in the number of jobs that have average earnings between $30,000 and $70,000 in Wisconsin, the 10th-lowest rate across all states. Despite this, middle class statistics are strong for the other seven metrics we considered. In particular, a large percentage of the population in Wisconsin may be defined as middle class and income inequality is low. In 2018, almost 47% of households made between $35,000 and $100,000, the seventh-highest percentage in any state, and the Gini coefficient was 0.45, the ninth-lowest in the study.
10. Minnesota
Median household incomes in Minnesota have increased by 14.37% in the five-year period from 2014 through 2018. In 2018, the median household income adjusted for cost of living in the state was $72,073, the second-highest of any state in the top 10 and fourth-highest overall. Additionally, Minnesotans have high rates of homeownership. Of occupied housing units, 71.45% were owner-occupied, the third-highest across all states.
Lou Varricchio is a freelance reporter for True North Reports. Send him news tips at lvinvt@gmx.com.
That study is one sided drivel.
No one should pay attention to it, because it is not reality based.
If a household has two workers and two children in school, typical middle class, it’s gross income will be about $80,000, but after paying all taxes, including sales, room and meals, property, education, state, federal, and FICA, there is about $50,000 left over for heating, electricity, medical and other insurance, college tuition, food, clothes, mortgage, gasoline, etc., there is practically nothing left over, and if kids are in college, the parents likely would be getting a second mortgage to pay for it.
What “aspirations” can such a middle class realize?
Play video games?
Watch TV?
Texting friends?
The so called study does not detail any aspirations, just some general term.
Here’s another point of view about VT. It’s interesting as some 43 states are noted regarding their status.This link takes you to page 23, Vermont. Draw your own conclusions. This is from Forbes.
https://www3.forbes.com/leadership/the-u-s-states-people-are-fleeing-and-the-ones-they-are-moving-to-vue/23/
A couple of observations, if Vermont is so middle class friendly, why show a picture of hippy Burlington to illustrate the point, also it appears that the study did not address the issue of the absentee home ownership. If so, the results might well be different.
72% of Vermonters live in owned homes, great, and $35,000 defines a middle class household!!!!!
BUT, every effort by Montpeculiar is to forbid any home construction, below say, $400,000, and all others will be piled up in these 3 story 30 apartment elevator joints within steps of the bus, allowing one parking space, owning nothing and Hope for quiet neighbors, and pray for at least one window which faces the sun.
Vermont is not the land of the free – despite the efforts of the Green Mountain Boys
“Vermont is not the land of the free – despite the efforts of the Green Mountain Boys”
We had a good run up to the 1960’s then took a sharp turn left into oblivion….
Interesting picture of “normal” Vermont. Travel the country side (state) in rural areas. Towns in disrepair, houses the same. Think a calendar should be published showing the Real Vermont Life. I know many subjects / images showing the opposite side of VT. This article is propaganda.
Oh ya, the touristy towns of Weston, Woodstock, Manchester, Burlington (and that area), Montpelier, Newfane, Townshend, Chester, Jamaica, etc is not the real VT.
As the saying goes: “Figures don’t lie, but liars can figure”.
This is utter nonsense. To enter the middle class in VT requires an income of over 50K. Most don’t have that without working 2 jobs or having two incomes. — Both of which mean you are not middle class.
Researchers behind the study defined the “American Dream” as consisting primarily of
homeownership and financial independence, well not sure who they interviewed ??
I assume they gathered their data from walking up and down Church Street in Burlington,
they surely didn’t ask the homeowners who are overburdened with taxes to support all the
foolishness.
Let’s see Vermont, overtaxed, billions of unfunded liabilities, lack of quality jobs, and we
are rated #7 …………. wow, what were the questions in this bogus survey ??
If this report is intended to indicate there’s hope for Vermont, think again. The report is misleading – at best. First, it cherry picks its sample (2014 to 2018). Second, it uses property ownership as a determinant without considering the cost of property ownership.
“7. Vermont Many residents in Vermont are homeowners. Census estimates show that 72.23% of occupied housing units are lived in by their owners, the second-highest percentage for this metric of any state. Vermont also ranks eighth overall for its Gini index – at 0.45 – and seventh overall its middle-class job growth from 2014 through 2018 – at 30%.”
Consider this from the United States Department of Labor
VT Labor Force VT Employment
Jan 2014 348789 334392
Jan 2018 346808 337273
– 1981 + 2881
VT Labor Force VT Employment
Jan 2009 359635 337747
Oct 2019 344373 336657
– 15,262 – 1,090
Now consider that owning a home in Vermont means you pay property taxes that are 5th highest in the U.S.