Special Report

The Best (and Worst) States for Business

Atlanta, Georgia 3
Source: Thinkstock

21. Georgia
> 1-yr. real GDP change: 2.6% (13th highest)
> Avg. salary: $50,519 (18th highest)
> Adults w/ bachelor’s degree: 29.9% (23rd highest)
> Patents issued: 2,465 (16th highest)
> Working-age population chg. 2010-2020: +12.0% (8th highest)

Only about a quarter of entrepreneurial enterprises in Georgia reported struggling to find qualified labor, one of the smaller shares of any state. Labor shortages will likely be even less of a problem in the coming years. The state’s working-age population is projected to increase by 14.3% between 2010 and 2020, more than double the corresponding national growth rate.

However, the limited spending power among a relatively large share of consumers in the Peach State is not helping business. The typical Georgia household earns $51,244 a year, or $4,500 less than the typical American household. Also, 17% of state residents live in poverty, one of the larger shares of any state.

Looking down South beach on a beautiful day Miami, Florida
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22. Florida
> 1-yr. real GDP change: 4.0% (3rd highest)
> Avg. salary: $47,686 (25th highest)
> Adults w/ bachelor’s degree: 28.4% (23rd lowest)
> Patents issued: 4,054 (10th highest)
> Working-age population chg. 2010-2020: +13.6% (6th highest)

Florida has a reputation for being a destination for retirees, but the state also has a growing population of younger residents, which will likely benefit state businesses looking for workers. The working-age population in the state is projected to grow by 13.6% between 2010 and 2020, nearly three times the national growth rate. According to the Census’ Annual survey of Entrepreneurs, Florida also has a highly favorable tax structure for startups.

On the other hand, entrepreneurs in the same study were among the most likely in the country to report difficulty accessing financial capital.

Skyline of Hartford Connecticut on a beautiful sunny day
Source: Thinkstock

23. Connecticut
> 1-yr. real GDP change: 0.7% (7th lowest)
> Avg. salary: $64,551 (3rd highest)
> Adults w/ bachelor’s degree: 38.3% (4th highest)
> Patents issued: 2,158 (18th highest)
> Working-age population chg. 2010-2020: +1.1% (18th lowest)

In Connecticut, opposing forces work to both foster and stymie a healthy business environment. One favorable condition is the state’s deep talent pool. An estimated 38.3% of Connecticut adults have at least a bachelor’s degree, and 16.7% have a graduate or professional degree, the fourth and third largest shares of any state.

However, population loss and outbound migration have hindered economic growth in Connecticut, and other signs point to low confidence in the state’s economy. On the Annual Survey of Entrepreneurs, nearly half of all Connecticut businesses claimed slow sales have hurt profits, the third largest share of any state. The number of private establishments grew by just 0.1% in 2013, and in 2015 just 170 building permits were issued per 100,000 residents, less than half the national average.

Ocean City, New Jersey
Source: Thinkstock

24. New Jersey
> 1-yr. real GDP change: 2.0% (18th highest)
> Avg. salary: $61,765 (5th highest)
> Adults w/ bachelor’s degree: 37.6% (5th highest)
> Patents issued: 4,602 (8th highest)
> Working-age population chg. 2010-2020: +0.9% (17th lowest)

New Jersey has one of the most active entrepreneurial environments in the country. There were an estimated 53 venture capital deals in New Jersey in 2014 at an average of $18.2 million per deal — roughly $4.8 million more than the national average deal value. State workers and businesses were also awarded 51 patents per 100,000 people, among the most of any state.

One drawback to New Jersey’s business environment is the state’s poor roadway infrastructure. Despite spending $191,903 per mile on highways, nearly five times the national average, an estimated 31.0% of New Jersey roads are designated to be in poor condition, the third largest share of any state. For every mile of interstate in New Jersey in 2016, the trucking industry lost an estimated $526,323 in operational costs due to congestion, more than any other state.

Charleston, South Carolina, USA in the French Quarter.
Source: Thinkstock

25. South Carolina
> 1-yr. real GDP change: 2.5% (15th highest)
> Avg. salary: $43,223 (10th lowest)
> Adults w/ bachelor’s degree: 26.8% (16th lowest)
> Patents issued: 950 (24th lowest)
> Working-age population chg. 2010-2020: +8.2% (12th highest)

Businesses are less likely to thrive in dangerous, high crime areas — even the perception that a community is unsafe can be a major hindrance to commerce. In South Carolina there were 505 violent crimes for every 100,000 residents in 2015, more than in all but six other states. The state’s high violent crime rate does not likely help consumer spending. More than 45% of South Carolina business owners said they struggle slow sales, a larger share than in most other states.

Some conditions in South Carolina are favorable to employers, however. South Carolina is a right-to-work state. Only 2.1% of workers in the state are unionized, the smallest share nationwide.