It is the state with the worst economy – 24/7 Wall St.
The health of a state’s economy depends on perspective. For businesses, the main considerations may be taxes and the extent to which the workforce can organize or demand benefits. For workers, the stakes tend more towards wages and insurance. For economists, the measures could be unemployment and the state’s gross domestic product (GDP). While it’s hard to say which of these should be the deciding factors, there are ways to combine them.
To determine the state with the worst economy, both in the years leading up to the pandemic and during it, 24/7 Wall St. created an index of five measures: economic growth over five years, growth in l employment over five years, poverty rate, unemployment rate and proportion of adults with a bachelor’s degree or above.
To make a final decision, we found that states with economies ranked at the bottom of the ladder depend on industries that have been hit hard by the COVID-19 pandemic. States like Hawaii and Nevada, where tourism is an economic mainstay, as well as states like Wyoming and Alaska that depend on resource extraction, rank lower on this list than they possibly could. -being without the pandemic.
To determine the state with the worst economy, 24/7 Wall St. ranked the states based on an index comprising the five metrics mentioned above. The average annual GDP growth rate from Q4 2015 to Q4 2020 is taken from the Bureau of Economic Analysis and has been included in the full weight index. The average annual employment growth rate from March 2016 to March 2021 is taken from the Bureau of Labor Statistics (BLS) and was included in the index at full weight. The seasonally adjusted unemployment rate in March 2021 was also taken from the BLS and was included in the index at full weight. The share of the population living below the poverty line and the share of adults with a bachelor’s degree or above are from the 2019 American Community Survey (ACS) of the US Census Bureau and were included in the full weighted index.
In addition to the index components, we have taken into account additional condition data. Real GDP and contributions to real GDP growth by industry come from the Bureau of Economic Analysis (BEA). Median household income, bachelor’s degree completion rate, and the share of workers commuting out of state to work are taken from ACS 2019. The Median Home Value Affordability Report Median household income is a 24/7 Wall Street calculation based on ACS data. Data on regional price parity, a measure of the cost of living, is from the BEA and is for 2019. Population changes due to natural causes and net migration from 2010 to 2020 are from the US Census Bureau. All data is for the most recent period available.
The state with the worst economy is Louisiana. Here are the details:
> 5 years. annualized GDP growth until Q4 2020: + 0.3% (12th lowest)
> 5 years. annualized employment growth until March 2021: -0.8% (8th lowest)
> Unemployment rate March 2021: 7.3% (8th highest)
> Poverty rate: 19.0% (2nd highest)
Louisiana’s economy is the worst in the United States. The state cut nearly 114,000 jobs during the pandemic, and in part as a result, employment is down 4.1% from five years ago. Currently 7.3% of the workforce in Louisiana is unemployed, one of the highest unemployment rates among the states and well above the national unemployment rate of 6.0%.
An estimated 19.0% of the state’s population live below the poverty line, the second largest share of any state and well above the national poverty rate of 12.3%. Widespread financial difficulties in Louisiana are indicative of deep-seated economic problems.
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