The wealthiest US states boast bigger economies than many European countries, with soaring household incomes and thriving industries. However, for several of these states that wasn't always the case. Pivotal moments in history changed their economic trajectory, building them into the powerhouses they are today. 

Read on to discover how fortunes changed for the better for five states leading the nation when it comes to GDP per capita today. 

The aptly named Golden State is the most populous in the US. With a median household income of $95,521 and a state GDP of nearly $4 trillion, California's industries range from filmmaking to farming.

If it were independent, it would rank as the world’s fifth-largest economy. But things haven’t always been so golden in this vast West Coast state...

Although Spanish colonizers reached California in 1542, they decided not to settle for another 200 years. Based out of Spanish forts and churches, these early settlers included missionaries – who were eager to convert the indigenous population to Christianity – and soldiers who wanted to take control of the land.

Many of Spain's colonies began to fight for independence in the early 1800s, with knock-on effects for the settlers in California. The Spanish navy could no longer bring supplies to the missions and presidios. After gaining its independence in 1821, Mexico set its sights on the missions, which would eventually be dismantled in the Mexican-American War.

The discovery of gold at Sutter’s sawmill in Coloma triggered the famous Gold Rush, transforming the Mexican province into a land where dreams came true. Miners extracted a whopping 28,280,711 fine ounces of gold between 1850 and 1859. At the time, a fine ounce was worth around $20 so this bounty brought in more than $565 million (nearly $21.5 billion today).

California quickly became one of the nation's wealthiest states, and it hasn't looked back since. 

The bulk of California's wealth now comes from more modern ventures such as tech – The Bay Area, home to Silicon Valley, is said to house 305,700 millionaires – and, of course, movies. Before the writers' strike in 2023, Hollywood, dubbed the "home of the entertainment industry," had supported more than 700,000 jobs.

As the TV and film industry finds its feet again, the state is fortunate to find itself home to several other prominent industries, including finance, trade, and manufacturing. 

New Jersey might be the fifth-smallest state by area, but it’s the fourth wealthiest. The average New Jersey family brings home $99,781 a year and almost 44% of adults have at least a bachelor’s degree.

Today, the state is considered an economic powerhouse, home to powerful industries ranging from pharmaceutical to logistics to IT and finance. Much of this is rooted in a key historical moment. 

Following the Revolutionary War, New Jersey was largely agricultural. With the turn of the century, the state rapidly industrialized with infamous founding father Alexander Hamilton — secretary of the treasury — attempting to build America’s first industrial town: Paterson.  

The stage had been set. Throughout the 19th century, New Jersey saw the construction of numerous canals and roads, which facilitated the trade of its manufactured goods and brought in coal and agricultural products to help fuel the industrial revolution taking place. 

Factories and mills continued to spring up in New Jersey's "Big Six" cities. As well as Paterson, Camden, Elizabeth, Jersey City, Newark, and Trenton were leading the way for industrialization with immigration from Europe supplying ample labor.

By 1900, the state had established itself as one of the nation’s economic pioneers, and it has maintained its reputation ever since. 

Nowadays, New Jersey is still thriving, with the 14th highest GDP per capita in the US and one of the lowest poverty rates at 8.2%. Manufacturing is still a healthy part of the state's economy with thousands of people employed by pharmaceutical firms like Merck, Bayer, and Novartis, as well as defense firm Lockheed Martin and telecoms company Nokia. 

Gambling is another source of income for the state, which has traditionally been more lenient about the practice than some of its neighbors, especially after the 2013 legalization of online sports betting. In 2024, month after month, the state saw record levels of gambling revenue – more than $558 million in September alone.

Hawaii has the highest cost of living in the US. Despite this, its poverty rate of 10.2% is below the national average of 11.5%, and the median household income is a generous $95,322. Tourism is overwhelmingly the mainstay of the Hawaiian economy, bringing in nearly $21 billion a year and supporting 197,000 jobs.

Trade is also an important piece of the pie, with $600 million worth of goods exported in 2023, including coffee, pineapples, and other tropical plants and products.

The Hawaiian Kingdom had been prosperous under King Kalākaua, who ruled from 1874 to 1891. In 1875, the island entered a free trade agreement with the US that bolstered its economy.

The king reintroduced much of the traditional Hawaiian culture that had been banned by missionaries, even building the 'Iolani Palace in Honolulu. The palace embraced many innovations of the era and boasted indoor plumbing and even a telephone before the White House did.  

Sugar plantation owners from the US came to dominate the kingdom's economy and politics and even staged a coup to remove the monarchy, leading to annexation by the US in 1898. At the time, many Hawaiians opposed American rule with fruit and sugar plantation workers, many of whom were immigrants, forced to live in poverty.  

Throughout the early 20th century, plantation workers staged strikes to campaign for fairer wages and better working conditions. The most famous of these was the Great Hawaii Sugar Strike in 1946. Costing over $15 million, it was one of the world’s most expensive strikes and a major catalyst for social change on the islands.  

By the 1950s, many Hawaiian residents began pushing for statehood. In June 1959, a landslide 94.3% voted in favor of joining the US, and the island was admitted to the Union on August 21. It was a pivotal moment for Hawaii, setting the stage for its economic success today. 

Mere days after the vote, Pan American Airways landed its first commercial flight in Hawaii. Tourism rapidly overtook sugar as the island’s most valuable industry. As reported in Time magazine in 1966, tourists were already spending $300 million a year (nearly $3 billion in today's money) "making tourism Hawaii’s largest civilian source of income, larger than the pineapple and sugar businesses combined."

Like Hawaii, Alaska joined the US officially in 1959. Due to its sparse population, it has one of the lowest state GDPs in America, but its GDP per capita is in the top 10 nationwide at $95,147. 

Its largest industries are mining, oil, fishing, and tourism. Because it relies heavily on natural resources, the economy has often fluctuated to reflect reserves. That means Alaska wasn’t always the prosperous state it is today.  

In 1867, the US bought Alaska from Russia for $7.2 million ($153 million in today's money). It turned out to be an excellent investment. Just five years later, gold was discovered near the capital city of Sitka, sparking the mass immigration of around 60,000 people. This was followed by the Klondike Gold Rush from 1896 to 1902, bringing a further 100,000 people into the region.  

While some gold hunters got rich, lots went home empty-handed. As the gold rush slowed down, many of the settlements that sprung up to house hopeful miners began to decline. Some disappeared completely, such as the now-abandoned town of Dyea.  

Once the gold rushes were over, Alaskans returned their attention to more traditional industries such as fishing. But all that changed when World War II broke out. Alaska’s strategic position near the west coast of America made it a valuable asset, with Brigadier General William Mitchell, considered the father of the US Air Force, saying: "He who holds Alaska will hold the world."

Due to its part in World War II, Alaska was transformed. Wartime construction had brought railways, telephone lines, highways, and oil pipelines to the region. Between 1940 and 1950, Alaska’s population swelled from 72,000 to 129,000. These factors, combined with its statehood in 1959, saw its economy boom during the 1960s. Even a devastating earthquake in 1964 triggered mass reconstruction rather than recession – and more luck was on its way.  

Alaska struck black gold in 1968 when vast oil reserves were discovered in Prudhoe Bay. The development of the oil field and Trans-Alaska Pipeline during the 1970s triggered an economic boom, with the state reaping many financial benefits.

By collecting taxes from the oil companies, the Alaskan government was able to fund new public services and even created a yearly cash dividend payout for residents. In 1996, each eligible Alaskan received $1,130 ($2,270 today), marking the first time the amount exceeded a thousand dollars.

With a GDP per capita of $95,982, North Dakota is the eighth richest state in the US. Its economy was completely transformed during the 1980s thanks to successful diversification and the development of fracking.

As well as energy, North Dakota's biggest industries are agriculture, healthcare and transport. But 50 years ago, the state looked very different. 

During the 1980s, North Dakota was largely dependent on agriculture, specifically sugar beet cultivation. However, the state was not immune to the Farm Crisis, and many of its farmers and small towns experienced economic devastation. One economist even said the state suffered more during the 1980s than during the Great Depression. 

At rock bottom and hoping to salvage the economy, an ambitious plan called Vision 2000 was unveiled to help grow and diversify the state. 

While the plan was a success, the biggest boon for North Dakota came from oil and gas activities in the Bakken Formation on the western side of the state.

When energy companies began fracking in 2006, North Dakota's economy boomed. According to the Western Dakota Energy Association and North Dakota Petroleum Council, tax revenues from the oil and gas industry brought nearly $22 billion into the state between 2008 and 2020. 

At the peak of the boom in 2012, North Dakota had a budget surplus of $1.6 billion ($2.2 billion today) and the fastest-growing population in the country. Despite the global slump in oil prices in 2014 and growing environmental concerns, production remains high in North Dakota, accounting for nearly $43 billion of its GDP.

Today, the sector is responsible for around 72,000 jobs in the state, which has a remarkably low unemployment rate of 2.3%.

Now take a look at what the American Dream looked like the decade you were born