Why Indiana is Now Among the Poorest States in America

A new ranking by Insider Monkey recently found the 25 poorest states in the country, and Indiana made it on the list.

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Money seems tight for everyone these days, but it's clear some have it worse than others. According to Insider Monkey, nearly 38 million people in the U.S. live below the poverty line, which is about 11.6% of the population. The researchers note that disparity in economic prosperity between states can be chocked up to several factors, including geographic locations, economic policies in local governments, and access to resources.

Insider Monkey recently set out to find the poorest states in the country by analyzing poverty rates and education levels in each state. Education levels were broken down into two groups, with the first being those aged 18 to 24 with an associates degree, followed by those 25 and above with a bachelor's degree. Insider Monkey reported that equal weightage was assigned to poverty and education levels, then summed up to get an aggregate score.

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The state with the smallest poverty rate was none other than New Hampshire, with just 5.6% of its population living below the poverty line. Mississippi, with a poverty rate of approximately 18.1%, claimed the title of the poorest state in America. (Perhaps that's why Mississippi is considered the "home of the blues?") Just behind Mississippi was Louisiana, followed by New Mexico. Indiana was a bit further down the list, but still well within the top 20 spots.

On Insider Monkey's list of the 25 poorest states in America, the Hoosier state claimed the No. 16 spot. Indiana has a poverty rate of about 10.8%, but Bloomington was found to be the poorest city in Indiana and one of the poorest in the country, having a poverty rate of 34.3%. Additionally, only about 38.2% of those between 18 and 24 hold an associate's degree, and 18.5% of Hoosiers over 25 have a bachelor's degree.

By now, you might be asking yourself what higher education has to do with poverty. Several studies have shown that there is a direct link between lack of education and poverty. However, I'll add that I have many friends in the trades who do very well with a two-year degree or no degree at all. Personally, I believe education can apply to more than just university studies and, thus, also ecompass technical training. Plus, college is not cheap. Education Data Initiative reports that as of July 2024, Americans have an outstanding federal loan balance of $1.620 trillion, which accounts for 91.2% of all student loans. That's a lot of debt, which is another factor that can also impact poverty rates.