While the U.S. economy is flourishing in the wake of the Great Recession, not all parts of the country are benefiting equally from the economic recovery.
Economic growth is driven by several factors, including population growth and labor productivity. In the United States, areas with low cost of living, low unemployment, nice weather, and a high degree of urbanization tend to be among the places with the fastest population growth — and often the fastest economic growth.
To determine the states with the best and worst economies, 24/7 Wall St. ranked states based on an index comprising five measures: GDP growth, job growth, unemployment rate, poverty rate, and bachelor’s degree attainment rate.
One of the most important indicators of economic health is educational attainment. Individuals with greater educational attainment are more likely to acquire secure, high-paying jobs, and areas where a larger share of the population is better educated are more likely to attract advanced, high-growth industries.
Many of the states with the best economies are in the fast-growing West and Southwest regions of the United States. While the population growth of America’s largest metropolitan areas — New York, Los Angeles, and Chicago — has slowed in recent years, growth in mid- to large-sized Sun Belt cities such as Austin, Orlando, Raleigh, and Las Vegas has been increased, reaching more than three times the national population growth rate since 2013.
Meanwhile, many of the worst-ranking states are located in the Rust Belt region of the United States. While many parts of the Rust Belt have made efforts to transition to high-tech and service-oriented industries in the wake of the domestic manufacturing sector’s decline of the past 50 years, widespread poverty and low educational attainment remain major obstacles to economic revival in these states. Many of these Rust Belt states rank among the poorest states in the country.