To rank in the upper echelon of income earners in California, individuals need to bring home more than $1 million annually, a study released July 17 by financial website Go Banking Rates found.
With a population of slightly more than 39 million people, and nearly 20 million income tax returns filed in 2022 for the 2021 tax year, about 200,000 California households make more than $1 million per year, according to the study—which adjusted the amounts earned to 2024 dollars to account for inflation.
Researchers expected the West Coast to rank the highest, but said that “surprisingly,” two Northeast states had a higher threshold for reaching the top 1 percent: Connecticut and Massachusetts.
The top 1 percent of earners in five states nationwide—including Connecticut, Massachusetts, California, Washington, and New Jersey, in order of ranking—bring home seven-figure incomes.
New York was hot on the heels of the top five, coming in $253 shy of joining the million-dollar club.
On the lower end of the scale, the top 1 percent of workers earn less than $500,000 in three states—New Mexico, Mississippi, and West Virginia.
In a separate study published July 2, Go Banking Rates found that incomes needed to qualify as “rich”—defined in the report as the top 5 percent of salaries in the state—are increasing across the country.
Between 2017 and 2022—the latest filing data available from the Internal Revenue Service—the average income of the top 5 percent of households in California spiked more than 37 percent, from slightly less than $450,000 to more than $613,000.
Every state experienced an increase over the same period, with Washington’s average jumping the most—nearly 44 percent from more than $378,000 to almost $545,000—while North Dakota’s nearly 15 percent bump from about $365,000 to approximately $419,000 was the lowest in the nation.
Workers in 12 states need to earn at least a half-million dollars annually to be classified as “wealthy,” according to the study, a sharp increase from 2017 when only those in Washington, D.C., and Connecticut needed to have such high salaries.
Some Californians say they’re feeling the pinch, with cost-of-living increases putting pressure on their families’ finances.
“No matter how much I make or how many hours I work, it’s still difficult to pay for everything,” Mary Smith, a Sacramento-based customer service representative, told The Epoch Times.
One Northern California resident said the findings were shocking, while commenting on a perceived need to earn large salaries just to make ends meet in the Golden State.
“I had no idea so many people were making that much money,” Juan Hernandez, a laborer in the East Bay, told The Epoch Times July 22. “But with the housing prices in the Bay Area, if you’re not a millionaire, it’s impossible to afford anything.”
Homes in the Bay Area cost on average $1.2 million, according to research from Zillow, an online real estate company.
The median price of homes sold in California hit nearly $860,000 in June 2024, according to online real estate listing firm Redfin.
