The States With the Best and Worst Economies

Rhode Island’s economy ranks as the worst in the New England region and 10th worst nationwide. As is the case in neighboring Massachusetts, Rhode Island’s job market has been devastated by COVID-19. The state’s June unemployment rate of 12.4% is more than triple what it was a year prior, at 3.6%. Over that period, the state shed over 53,000 jobs — the first time in the state in at least half a decade employment fell year-over-year in the month of June. The decline more than erased all the job gains in the state since June 2015.

Even before the pandemic, economic growth in Rhode Island has been slow. The state’s economy grew by only 3.4% between Q1 2015 and Q1 2020. Over the same period, the U.S. economy grew by 9.8%.

Like many other states in the Northeast — a region hit hard by COVID-19, with cases surging in the earlier weeks and months of the pandemic — New Jersey is now struggling with a severe unemployment problem. As of June, the state’s 16.6% jobless rate was second highest in the country, trailing only Massachusetts. There are nearly 550,000 fewer people working in New Jersey now than there were at the same time last year.

GDP growth has also been relatively slow in New Jersey in recent years. Over the five years since the first quarter of 2015, the state’s economy expanded by just 4.7%, less than half the comparable 9.8% national growth.

Michigan added tens of thousands of jobs each year from 2015 to 2019. But the pandemic has severely impacted employment in the state — the equivalent of 36.5% of the labor force has filed for unemployment since mid-March. The June 2020 unemployment rate of 14.8% was higher than all but five other states and well above the U.S. unemployment rate of 11.1% for that month.

Though Michigan’s GDP increased at an annual rate of 1.4% since 2015, this growth was likely hampered by people moving out of the state. From 2010 to 2019, over 73,000 more people moved out of Michigan than moved to it, equivalent to 0.7% of the 2010 population.

Alaska is one of just three states in which the equivalent of over half of the labor force has filed for unemployment since March 15. The state’s job market has long been in decline, contracting each year since 2015 for an annualized employment decline of 2.4% over the past five years.

Alaska had the highest monthly unemployment rate every June from 2016 to 2019, at over 6% each year. Though in June 2020 the state’s unemployment rate doubled from the previous year’s rate to 12.4%, it no longer ranked the highest but 11th among states. Alaska is one of just four states in which the GDP actually shrank from 2015 to 2020. Alaska also has the second highest crime rate in America.

Only six states have a higher unemployment rate than Illinois, where 14.6% of the labor force is out of a job. Between June 2015 and June 2019, Illinois added some 66,000 jobs. Between June 2019 and June 2020, however, a period in which COVID-19 took a toll on the state’s job market, Illinois shed a staggering 645,000 jobs.

The coronavirus is only the latest struggle in a state where economic conditions have already been weak. For example, over the five years ending with the first quarter of 2020, Illinois’ economy grew by 4.9% — half the growth rate of the U.S. economy over the same period. Population growth can trigger economic growth, but there were nearly 160,000 fewer people living in Illinois in 2019 than there were in 2010.