Special Report

The States With the Best and Worst Economies

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6. Nebraska
> 5-yr. annualized GDP growth through Q4 2020: +1.2% (17th highest)
> 5-yr. annualized employment growth through March 2021: +0.0% (25th lowest)
> March 2021 unemployment rate: 2.9% (4th lowest)
> Poverty rate: 9.9% (10th lowest)

COVID-19 has taken a greater overall public health toll in Nebraska — infecting more people per capita than it has nationwide. The virus’s economic toll appears to have been less pronounced in the state, however. Unemployment is just 2.9% in Nebraska, 0.1 percentage points lower than it was in March 2019. Meanwhile, the national jobless rate is 6.0% — 2.2 percentage points above where it was two years ago.

Strong economic conditions in Nebraska have made residents less susceptible to serious financial hardship than most other Americans. Nebraska is one of only 11 states where fewer than one in every 10 residents live below the poverty line.

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7. Minnesota
> 5-yr. annualized GDP growth through Q4 2020: +1.1% (21st highest)
> 5-yr. annualized employment growth through March 2021: -0.1% (21st lowest)
> March 2021 unemployment rate: 4.2% (15th lowest)
> Poverty rate: 9.0% (3rd lowest)

Economic conditions in Minnesota have created one of the most financially secure populations of any state. The median household income of $74,593 is about $9,000 greater than the national median. Additionally, only 9.0% of state residents live below the poverty line, the third smallest share of any state. Better-educated Americans are more likely to have high paying occupations and less likely to face financial hardship — and in Minnesota, 37.3% of adults have a bachelor’s degree, compared to 33.1% of adults nationwide.

Minnesota’s job market was hit harder by the COVID-19 pandemic than the country overall. In fact, there are fewer people working in the state now than there were even five years ago. Still, Minnesota’s unemployment rate of 4.2% remains lower than the comparable 6.0% national rate.

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8. Massachusetts
> 5-yr. annualized GDP growth through Q4 2020: +1.4% (15th highest)
> 5-yr. annualized employment growth through March 2021: +0.2% (20th highest)
> March 2021 unemployment rate: 6.8% (13th highest)
> Poverty rate: 9.4% (8th lowest)

Massachusetts is home to the best-educated workforce in the country. An estimated 45% of adults in the state have a bachelor’s degree or higher, more than every other state and well above the 33.1% share of adults nationwide.

While the COVID-19 pandemic resulted in massive job losses in Massachusetts, these employment declines were not enough to erase the progress of the last five years as they were in other other parts of the country. Additionally, due in part to strong growth in the information and professional, scientific, and technical services industries, Massachusetts’s GDP expanded at an average annual rate of 1.4% since the fourth quarter of 2015, a faster rate than most states.

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9. Georgia
> 5-yr. annualized GDP growth through Q4 2020: +2.2% (8th highest)
> 5-yr. annualized employment growth through March 2021: +1.7% (4th highest)
> March 2021 unemployment rate: 4.5% (18th lowest)
> Poverty rate: 13.3% (14th highest)

The public health toll caused by the coronavirus was heavier in Georgia than it was in most of the country, as the state has more cumulative infections per capita than average. The pandemic’s economic consequences have been less pronounced, however. Only 4.5% of Georgia’s labor force are unemployed, well below the comparable 6.0% national jobless rate. Additionally, employment growth in the Peach State has averaged 1.7% per year since 2016, faster than in all but three other states.

Georgia also reported faster than average GDP growth in the last five years. The state’s economy expanded at an average rate of 2.2% each year since the end of 2015, well above the comparable 1.4% national annualized growth rate.

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10. Oregon
> 5-yr. annualized GDP growth through Q4 2020: +2.8% (6th highest)
> 5-yr. annualized employment growth through March 2021: +0.9% (10th highest)
> March 2021 unemployment rate: 6.0% (20th highest)
> Poverty rate: 11.4% (23rd lowest)

Half of the 10 states with the best economies are in the West — and Oregon is one of them. The state’s high rank is due in large part to strong GDP growth in recent years, despite the significant setbacks caused by the COVID-19 pandemic. Over the last half decade, the state’s economy expanded at an average of 2.8% each year — even with a 2.4% contraction from the end of 2019 through 2020.

One of the fastest growing industries in Oregon is construction. The sector’s growth is fueled in part by population growth. Oregon’s population expanded by 8.2% from net migration alone from 2010 to 2020, more than in all but eight other states.