Special Report

Best and Worst States for Business

Samuel Stebbins, Michael B. Sauter

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31. South Carolina
> 1-yr. real GDP change: +2.6% (17th best)
> Avg. earnings per job: $50,893 (11th lowest)
> Adults with a bachelor’s degree: 28.3% (14th lowest)
> 2018 venture capital deals: 0.8 per 100,000 people (10th fewest)

As a right-to-work state, South Carolina has the second lowest union membership rate of any state. Just 2.8% of the labor force is in a union, well below the 10.6% national union membership rate. While this gives some employers in the state more control over their workers, other factors related to the state’s labor force and human capital might not. For example, just 28.3% of adults in the state have a bachelor’s degree or higher, below the 32.6% national share. This may make it more difficult for some employers to find qualified workers.

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32. New Jersey
> 1-yr. real GDP change: +2.2% (19th worst)
> Avg. earnings per job: $71,228 (6th highest)
> Adults with a bachelor’s degree: 40.8% (3rd highest)
> 2018 venture capital deals: 1.0 per 100,000 people (16th fewest)

Roadway congestion is a considerable problem for many businesses in New Jersey. Traffic delays cost the trucking industry more on a per mile basis in New Jersey than they do in any other state. There are also several advantages for businesses operating New Jersey, however. One of them is the relatively skilled talent pool for employers to draw from. Over 40% of adults in the state have at least a bachelor’s degree, and over 90% have a high school diploma, each higher than the respective 32.6% and 88.3% national shares.

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33. Tennessee
> 1-yr. real GDP change: +3.1% (12th best)
> Avg. earnings per job: $56,656 (24th highest)
> Adults with a bachelor’s degree: 27.5% (11th lowest)
> 2018 venture capital deals: 1.2 per 100,000 people (24th fewest)

High crime rates can reduce overall quality of life and make an area less attractive to new businesses. In Tennessee, there were 624 violent crimes for every 100,000 people in 2018, the third highest rate of any state and well above the national rate of 381 violent crimes per 100,000. Still, economic growth has been strong in the state. Between 2017 and 2018, Tennessee’s economy grew by 3.1%, faster than most states and the 2.9% national GDP growth rate.

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34. Wisconsin
> 1-yr. real GDP change: +2.4% (22nd worst)
> Avg. earnings per job: $55,896 (25th lowest)
> Adults with a bachelor’s degree: 30.0% (22nd lowest)
> 2018 venture capital deals: 1.3 per 100,000 people (23rd most)

New and growing businesses in Wisconsin may face hiring difficulties in the coming years. Over the next decade, Wisconsin’s working-age population is projected to contract by 1.3%, even as the number of Americans between the ages of 15 and 55 is projected to expand by 4.6%. Still, a larger share of workers in Wisconsin meets basic prerequisite for employment as 92.1% of adults in the state have a high school diploma, a larger share than the 88.3% share of adults nationwide.

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35. Arkansas
> 1-yr. real GDP change: +1.7% (11th worst)
> Avg. earnings per job: $47,272 (3rd lowest)
> Adults with a bachelor’s degree: 23.3% (3rd lowest)
> 2018 venture capital deals: 0.9 per 100,000 people (15th fewest)

Economic growth has been relatively sluggish in Arkansas. Between 2017 and 2018, the state’s GDP expanded by just 1.7%, slower than most states and below the 2.9% national GDP growth. Finding qualified workers may not be as easy as in many other states, as just 23.3% of adults in the state have a bachelor’s degree or higher, a much smaller share than the 32.6% share of adults nationwide.

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