Why Louisiana Is the Worst State for Business

Unemployment has steadily declined and remains close to a 10-year low. And with investors confident about the economy, the Dow Jones Industrial Average broke through the 20,000 mark early this year. By these and other key measures, business in the United States appears to be booming.

This period of economic growth — much of it as a recovery from the Great Recession — has by no means been even across the country. A number of factors can explain the regional differences in economic growth, including the varying business climates across states.

To determine which states have the best and worst business climates, 24/7 Wall St. identified and reviewed nearly 50 measures of doing business. And the analysis showed that, even worse than West Virginia and Mississippi, Louisiana was the worst state for business:

50. Louisiana
> 1-yr. real GDP change: 1.0% (12th lowest)
> Avg. salary: $46,784 (22nd lowest)
> Adults w/ bachelor’s degree: 23.2% (4th lowest)
> Patents issued: 399 (14th lowest)
> Working-age population chg. 2010-2020: -3.2% (7th lowest)

No state is worse for business than Louisiana. Working-age Louisianans are less likely than the vast majority of state residents to have the qualifications many businesses look for in job applicants — just 23.2% of adults in the state have a bachelor’s degree, nearly the lowest percentage of all states. The presence of science, technology, engineering, and mathematics-related occupations usually reflects a business-friendly environment where companies can grow. In Louisiana, just 3.2% of occupations are STEM jobs, the third lowest share of all states. Unlike most states, Louisiana’s working-age population is also shrinking.

According to Louisiana’s department of economic development, 80% of the nation’s offshore oil rigs are in waters off the Louisiana coast. This suggests that while Louisiana is not especially business friendly, some types of businesses do better in the state than others.

That is a far cry from Utah, which placed as the best state to do business, in part due to the particularly business friendly regulatory climate there.

Note that Louisiana also was one of the most dangerous states in America and well represented among cities losing the most jobs last year, according to 24/7 Wall St.

To determine the best and worst states for business, 24/7 Wall St. compiled 47 measures into eight categories: economic conditions, business costs, state infrastructure, the availability and skill level of the workforce, quality of life, regulations, technology and innovation, and cost of living. Each category aimed to capture the essential elements that businesses consider when deciding where to locate, and each category consists of several measures. We created an index for each category using a geometric mean. We then used the geometric mean of each index score to calculate the overall scores.

See the full methodology and find out how all 50 states ranked among the best and worst for business.

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