(From Todd Epp, Northern Plains News)
South Dakota ranks 31st in the country for income levels when adjusted for cost of living, according to WalletHub.
The study used data from the U.S. Census Bureau and the Council for Community and Economic Research.
The state’s median income, adjusted for cost of living, is $72,189. The top five percent of earners make an average of $415,926. The bottom 20 percent earn $17,891 on average. This means the highest earners make about 23 times more than the lowest earners. The U.S. Census Bureau reports South Dakota’s unadjusted median household income at $72,421 for the years 2019–2023.
“In the United States, the highest-earning 10% of individuals earn over 12 times more than those in the lowest-earning 10%, based on the latest Census data,” said Chip Lupo, a WalletHub analyst. “By measuring the income of various percentiles against a state’s median income, we can better identify where income disparities are more prevalent, which could help us better understand why residents of certain states struggle more to make ends meet.”
How South Dakota Compares to Neighbors
Minnesota leads the region, ranking 7th in the country. Its median income is $89,434. Its lowest earners average $20,616, and the top earners make $486,764. Nebraska ranks 25th, with a median income of $75,610. North Dakota ranks 34th, with a median income of $81,960 and a bottom 20 percent average of $16,237. All these numbers are adjusted for cost of living.
WalletHub looked at three things: income for the top 5 percent, median income, and income for the bottom 20 percent. The top 5 percent counted for half the score. The median and bottom 20 percent each counted for a quarter.
Rural Areas Face Bigger Gaps
Rural counties in South Dakota often have lower wages and higher unemployment. Counties like Corson, Todd, and Ziebach report unemployment rates much higher than the state average and have lower incomes. For example, Todd County’s unemployment rate was 3.4% in March 2025, while the state average was about 1.8%, according to the South Dakota Department of Labor and Regulation.
“Income differences across states are primarily driven by differences in cost of living,” said Dr. Peter F. Orazem, a professor emeritus at Iowa State University, on WalletHub’s expert panel. “After correcting for cost of living, high incomes in San Francisco do not look as rosy compared to lower incomes in the Midwest. Rural area wages average about 20% lower than metro area wages, also reflecting differences in housing costs.”
A 2024 workforce report from the state said, “In many tribal and rural areas, families often rely on seasonal or part-time work. Underemployment, housing shortages, and limited childcare continue to constrain upward mobility.”
What the State Is Doing
State leaders have tried several ways to help with workforce shortages and low incomes. Recent state budgets have included a $200 million investment in workforce housing. This combines $150 million in state funds and $50 million in federal funds, with local communities and developers matching the money. The Local Infrastructure Improvement Program helps expand housing for workers.
Childcare and early learning are also priorities. South Dakota’s economy loses an estimated $329 million each year because of childcare problems, according to state agencies. Both state and federal programs are working to improve access and affordability for families.
The Legislature also passed funding for rural economic development zones this year. South Dakota takes part in federal Rural Business Development Grants, which help small rural businesses with training, capital, and technical support.
“In order to reduce income inequality, the best thing government can do is expand opportunity,” said Dr. Marc Fusaro, dean of the DeVille School of Business at Walsh University, in WalletHub’s report. “That means reducing barriers for people who want to work, start a business, get an education, or invest in their future. Policies should encourage upward mobility, not just redistribute income.”
Metro Areas Still See Gaps
Even in cities, income gaps remain. Sioux Falls, the state’s largest city, has a median household income of $74,714, according to the latest Census estimate. That is a little higher than the state median, but living costs are also higher.
The South Dakota Housing Development Authority said in 2023 that more than 25 percent of renter households in the state spend over 30 percent of their income on housing. This is called being “cost burdened” and matches national trends.
Looking Ahead
Experts say it is important to track income inequality and cost of living together. WalletHub’s study shows that while South Dakota’s highest earners do well, many residents are left behind.
The study used public data as of May 6, 2025, and included all 50 states plus the District of Columbia.
