Special Report

The Best and Worst State Economies, According to New Prosperity Index

Measuring a society’s level of prosperity is not only about gauging economic factors like gross domestic product or median household income, but also about other aspects that impact the quality of life for the average citizen. A society can be affluent and stable and still be a place where too many of its people struggle to access health care, a quality education, public services, health-affirming natural environments, or well-maintained infrastructure.

In a large country like the United States, the level of prosperity varies considerably among the 50 states relative to each other. One state can do well in some metrics, such as the ease of doing business, and poorly in another, such as public safety. (Also see, these are the states where inflation is causing the most stress.)

To identify the most and least prosperous states, 24/7 Wall St. reviewed the 2022 American Dream Prosperity Index, a collaboration between London-based think-tank Legatum Institute and the Milken Center for Advancing the American Dream. States are ranked by their index scores out of 100, from most to least prosperous. The report also provided the scores for the three broad categories considered: inclusivity, economics, and personal empowerment. The full report methodology can be found here.

This index compares U.S. states based on 11 pillars that make up a safe and stable capitalist society. These pillars include quality of governance and infrastructure, the ease of doing business, environmental protection, and other quality-of-life factors. These pillars are then grouped into the three broader categories.

A state can rank high in one of these broad categories and low in another, which would bring down its overall ranking. 

For example, Texas ranks very high in economic openness — a category that includes infrastructure, fiscal sustainability, and competitiveness — but it ranks near the bottom in inclusiveness, pulled down by poor public safety and quality of governance. Despite its economic clout, influence on national policies, and geographic/demographic size, Texas ranks only 38th in prosperity. 

States that rank among the top 10 most prosperous include Massachusetts, Minnesota, Utah, Colorado, Washington, and Connecticut. California, the country’s most populated state, ranks 28th. Near the bottom are Oklahoma, West Virginia, Nevada, Alabama, New Mexico, and Mississippi.

Notably, none of the 10 most populous states make it to the top 10 list of most prosperous. New York ranks 13th, the highest among these states, while Florida ranks 29th and Georgia ranks 35th. Among the states with the smallest populations, New Hampshire and Vermont are among the 10 most prosperous. Of course, there are many ways to look at the issue. Compare the American Dream Prosperity Index to 24/7 Wall St.’s best and worst states to live in 2022.

Here are the most and least prosperous U.S. states.

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