> 1-yr. real GDP change: 3.4% (6th highest)
> Avg. salary: $45,204 (18th lowest)
> Adults w/ bachelor’s degree: 31.8% (16th highest)
> Patents issued: 1,404 (23rd highest)
> Working-age population chg. 2010-2020: +20.5% (2nd highest)
Utah is this year’s best state for business. The state’s labor market and regulatory climate are particularly business friendly compared to other states. Utah’s working-age population is projected to grow by more than 20% between 2010 and 2020, far greater than the comparable projected growth nationwide of less than 5%. Businesses are constantly looking for cost-cutting opportunities. Therefore, a state’s regulatory climate, including its tax policy and the power unions have in the state, can be a major factor when a company is considering where to locate and conduct business. Utah is among the top states in the Mercatus Center’s Regulatory Freedom Index, a ranking of state tax policy. Also, just 3.9% of Utah’s workers are union members, the third lowest share of all states. While this is perhaps less friendly to workers, it is a good sign for most businesses.
> 1-yr. real GDP change: 3.8% (4th highest)
> Avg. salary: $65,196 (2nd highest)
> Adults w/ bachelor’s degree: 41.5% (the highest)
> Patents issued: 6,777 (4th highest)
> Working-age population chg. 2010-2020: -0.6% (12th lowest)
A company’s greatest asset is often its workers, and in Massachusetts, employers have access to a highly qualified labor force. Some 41.5% of state adults have at least a bachelor’s degree, and 18.4% have a graduate or professional degree, each the largest share of any state in the country. Perhaps due to the high levels of educational attainment, Massachusetts’ labor force is especially innovative. About 100 patents were issued per 100,000 state residents in 2014, more than in any other state after California.
Businesses in Massachusetts benefit further from the state’s affluent population. High incomes can contribute to greater consumer spending and are reflective of a healthy economy. The typical Massachusetts household earns $70,628 a year, far more than the $55,775 national median income.
> 1-yr. real GDP change: 2.7% (10th highest)
> Avg. salary: $39,633 (2nd lowest)
> Adults w/ bachelor’s degree: 26.0% (11th lowest)
> Patents issued: 865 (22nd lowest)
> Working-age population chg. 2010-2020: +15.0% (5th highest)
According to the Census’ Annual Survey of Entrepreneurs, for 31% of businesses in Idaho finding qualified labor is a challenge and a drag on profitability, slightly larger than the national share. This may soon change, however, as Idaho’s working-age population is projected to grow by 15% between 2010 and 2020, roughly triple the corresponding national growth rate.
Currently, businesses in the state benefit from a relatively low level of government regulations. Idaho is a right-to-work state. Only 6.8% of workers in Idaho are union members, well below the 11.1% share of all U.S. workers. The average salary for a worker in Idaho is only $39,633 a year, second lowest in the country. While low salaries may not satisfy workers, they are a boon for businesses.
> 1-yr. real GDP change: 3.2% (7th highest)
> Avg. salary: $54,900 (11th highest)
> Adults w/ bachelor’s degree: 39.2% (2nd highest)
> Patents issued: 3,045 (14th highest)
> Working-age population chg. 2010-2020: +8.6% (11th highest)
One of the best aspects of Colorado’s business climate is the state’s deep pool of talented workers. An estimated 39.2% of Colorado adults have at least a bachelor’s degree, the largest share of any state other than Massachusetts. Some 14.5% of adults in the state also have a graduate or professional degree, the seventh most of all states. This high level of qualification among residents likely helps attract high paying, high-tech business to the area. Some of the highest paying occupations are in science, technology, engineering, and mathematics (STEM) fields, which in Colorado comprise 7.4% of all jobs — the fourth highest share of any state.
The state’s decision to legalize marijuana in 2012 created an industry trail blazed by small businesses and entrepreneurs, which generated over $1.1 billion in the first 10 months of 2016. A growing economy, Colorado issued the sixth most new building permits per capita in 2015 and had the fifth fastest growth in private business establishments.
5. North Dakota
> 1-yr. real GDP change: -2.6% (the lowest)
> Avg. salary: $49,795 (19th highest)
> Adults w/ bachelor’s degree: 29.1% (24th lowest)
> Patents issued: 118 (4th lowest)
> Working-age population chg. 2010-2020: +0.4% (15th lowest)
North Dakota has experienced something of a modern gold rush in recent years. After the discovery of the Parshall Oil Field in the Bakken formation in 2006, North Dakota ramped its oil production from less than 200,000 barrels a day to more than 1 million by 2014. While the oil boom has slowed considerably since then, North Dakota’s GDP annual growth rate of 7.7% from 2010 to 2015 was more than that of any other state and four times the national growth rate.
For the many Americans who relocated to North Dakota during the oil boom, the move was likely made easier by the state’s low cost of living. Goods and services cost 92 cents on the dollar in North Dakota compared to the nation as a whole, and the state’s median homeownership expenses amount to just 17.5% of household income — a smaller share than in any state other than West Virginia.