The Best (and Worst) States for Business

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21. Nebraska
> Real GDP growth, 2013-2014:
2.3% (18th highest)
> Average wages and salaries, 2014: $42,747 (13th lowest)
> Pct. of adults with bachelor’s degree, 2014: 29.5% (20th highest)
> Patents issued to residents, 2014: 364 (12th lowest)
> Projected working-age population growth, 2010-2020: 2.4% (24th lowest)

Indicative of a healthy economy, Nebraska has a very low unemployment rate. Only 3.3% of the Cornhusker State’s workforce is out a job, the lowest unemployment rate in the country after only North Dakota. Additionally, both living and doing business in Nebraska is relatively cheap. The cost of goods and services is approximately 10% lower in the state than it is on average across the country. Workers in states with relatively low costs of living also tend to have lower wages. The average worker in Nebraska earns $42,747 annually, considerably less than the $51,552 the typical American worker earns each year. Despite several advantages for companies in the state, with only 19.4 patents issued per 100,000 residents each year, Nebraska is not an especially innovative state.

22. Florida
> Real GDP growth, 2013-2014:
2.7% (11th highest)
> Average wages and salaries, 2014: $46,228 (25th lowest)
> Pct. of adults with bachelor’s degree, 2014: 27.3% (16th lowest)
> Patents issued to residents, 2014: 4,210 (10th highest)
> Projected working-age population growth, 2010-2020: 13.6% (6th highest)

Businesses need to be able to rely on infrastructure such as roads and bridges in order to operate smoothly, and Florida spends considerable sums to ensure its roads are well maintained. Expenditure per mile of road in Florida is equivalent to $78,198, more than double the national average expenditure of $36,977. Largely as a result, only 2.6% of roadway miles in the state are in poor condition compared to 10.7% of roadway miles across the country.

Florida’s labor force is also growing faster than most states, providing larger applicant pools for hiring businesses as well as an indication of a healthy job market in the state. Over the decade through 2020, the working-age population is expected to grow by 13.6%, more than double the corresponding nationwide growth rate.

23. Arizona
> Real GDP growth, 2013-2014:
2.4% (16th highest)
> Average wages and salaries, 2014: $47,823 (21st highest)
> Pct. of adults with bachelor’s degree, 2014: 27.6% (20th lowest)
> Patents issued to residents, 2014: 2,517 (16th highest)
> Projected working-age population growth, 2010-2020: 18.8% (3rd highest)

Lukewarm economic growth in Arizona over the past five years may have cooled down the state’s business climate. Arizona’s economy has grown at a pace similar to the nation as a whole, and the jobless rate has lagged behind the nation over that time. The state’s unemployment rate of 6.9% is one of the highest in the country.

Nevertheless, increasingly strong human capital may benefit Arizona’s businesses in the long run. Last year, Arizona had the fourth largest net inflow of new residents, surpassed only by Florida, Texas, and South Carolina. Over the 10 years through 2020, Arizona’s working-age population is expected to grow by 18.8%, the third largest projected growth of any state. Arizona’s rapidly expanding population may bring with it talent and improve human capital in the state overall.

24. New York
> Real GDP growth, 2013-2014:
2.7% (11th highest)
> Average wages and salaries, 2014: $65,069 (the highest)
> Pct. of adults with bachelor’s degree, 2014: 34.5% (9th highest)
> Patents issued to residents, 2014: 8,904 (3rd highest)
> Projected working-age population growth, 2010-2020: -1.4% (9th lowest)

With many tech startups and venture capital firms based in New York City, New York is one of the most innovative states in the country. New Yorkers claimed some 8,904 patents in 2014, more than in all but two other states. Additionally, New York tends to invest heavily in new ideas as the state boasts the second most venture capital deals in the country, trailing only California.

Employee salaries are a major expense for businesses, and on average workers in New York make more than in any other state. The typical annual salary of a New Yorker is $65,069, far higher than the $51,552 salary of the average American. One contributing factor to the high average salary is the relatively high gender pay equality. New York women make 86.8% of what men in the state do, the smallest pay gap of any state in the country.

25. Georgia
> Real GDP growth, 2013-2014:
2.7% (11th highest)
> Average wages and salaries, 2014: $49,149 (19th highest)
> Pct. of adults with bachelor’s degree, 2014: 29.1% (23rd highest)
> Patents issued to residents, 2014: 2,669 (15th highest)
> Projected working-age population growth, 2010-2020: 12.0% (8th highest)

Quality of life in Georgia is by many measures sub par, which could hinder businesses’ prospects of having a healthy pool of job applicants. State residents are among the least healthy in the country, due at least in part to the state’s high uninsurance rate of 15.8%. Residents without health insurance are far less likely to visit the doctor and let medical conditions go unchecked.

On the other hand, the state’s economy is relatively strong, which is likely a boon for businesses. Georgia’s GDP grew by 2.7% in 2014, faster than the national growth rate of 2.2%. The state also receives a AAA rating with a stable outlook for its debt, making it one of just 14 states with the best credit rating.