The health of a state’s economy depends on perspective. For businesses, the primary considerations may be taxes and the extent to which workforces can organize or demand benefits. For workers, the issues tend to be more about wages and insurance. For economists, the measures could be unemployment and state gross domestic product. While it is hard to say which of these should be the deciding factors, there are some ways to blend them together.
To determine the state with the worst economy, both in the years leading up to the pandemic and during it, 24/7 Wall St. created an index of five measures: five-year economic growth, five-year employment growth, the poverty rate, unemployment rate, and share of adults with a bachelor’s degree or higher. The state with the worst economy is Louisiana.
We found that the states with economies that rank on the lower end depend on industries that were hit hard by the COVID-19 pandemic. States like Hawaii and Nevada, where tourism is an economic pillar, as well as states like Wyoming and Alaska that depend on resource extraction, rank lower on this list than they perhaps otherwise would if not for the pandemic. These are the best and worst run states in America: A survey of all 50.
Here is how Louisiana ranks in each of our index measures:
> 5-yr. annualized GDP growth through Q4 2020: +0.3% (12th lowest)
> 5-yr. annualized employment growth through March 2021: -0.8% (8th lowest)
> March 2021 unemployment rate: 7.3% (8th highest)
> Poverty rate: 19.0% (2nd highest)
> Share of adults with a bachelor’s degree or higher: 25.0% (4th lowest)
Louisiana shed nearly 114,000 jobs during the pandemic, and partially as a result, employment is down 4.1% from where it was five years ago. Currently, 7.3% of the labor force in Louisiana are out of work, one of the higher jobless rates among states and well above the 6.0% national unemployment rate.
An estimated 19.0% of the state’s population live below the poverty line, the second largest share of any state and well above the 12.3% national poverty rate. The widespread financial hardship in Louisiana is indicative of deeply seated economic problems. Find out which is the best city to live in Louisiana here: The best city to live in every state.