Minnesota is third only to first-place Washington and second-place Texas in Money-rates.com's 2014 list of the best states to make a living.
The list accounts for each state's average salary, cost of living, unemployment rate, and workplace satisfaction, then uses that data to rank the 10 best and worst.
Asked about Minnesota's impressive ranking, the study's author, Richard Barrington, senior financial analyst for Money-Rates.com, tells us, "One of the first things I spot right off the bat is that the average wage is higher than the national average [about $3,000 higher in terms of salary, to be specific], and yet the cost of living is right about at the national average."
"This is in contrast with a lot of states in the northeast where you see very flashy-looking wages but you look at cost of living and it might be 20-30 percent higher than the rest of the nation," Barrington continues. "Higher wages can be a bit of an illusion because the cost of living is so much higher."
Minnesota also fared well in terms of unemployment and workplace satisfaction, meaning the Land of 10,000 Lakes had good showings in all categories.
"A very important factor is low unemployment, and Minnesota was at 4.7 percent, which is a little less than a point lower than the typical state, Barrington says. "And the other factor was a Gallup-Healthways survey of workplace conditions and Minnesota came out in the top 10 in terms of how people feel about where the work."
Barrington's writeup of the study for Money-Rates.com notes that Minnesota "does have a higher-than-average cost of living and tax burden, but incomes in the state are more than enough to make up for these disadvantages."
In 2013, Minnesota finished sixth. Asked to explain Minnesota's rise up the ranking, Barrington says, "The clearest sign I can see as to why Minnesota improved in this year's ranking is that the average wage in the state grew faster than in the average state."
"For Minnesota, the average wage grew by 2.6 percent, while the average of all states increased by just 1.4 percent," he continues.
To see the full top 10 lists of best and worst states to make a living, along with one factor that helps explain the ranking, click to page two.
Best states to make a living:
Nebraska (one of the lowest unemployment rates)
Oklahoma (low cost of living)
Nevada (no income tax and low cost of living)
Virginia (high incomes)
North Dakota (nation's lowest unemployment rate)
Utah (low cost of living and unemployment)
Colorado (high average income)
Texas (no income tax)
Washington (repeat winner -- one of highest income levels, no income tax, high workplace satisfaction)
Worst states to make a living:
South Carolina (low wages)
New Jersey (high cost of living)
Arkansas (low wages, high unemployment)
Alabama (low wages, high unemployment)
Alaska (high cost of living, low workplace satisfaction)
Connecticut (high cost of living)
Rhode Island (highest unemployment in nation)
Mississippi (lowest workplace satisfaction of any state)
New York (high cost of living)
Hawaii (worst state to make a living four years in a row -- high cost of living, low workplace satisfaction)