The Best and Worst State Economies in 2024

California, Texas, New York, and Florida have economies so large that if they were countries, they would rank in the top 20 in the world. To determine America’s top economic performers across a variety of metrics, the personal-finance website WalletHub today released its report on 2024’s Best & Worst State Economies, as well as expert commentary.

WalletHub compared the 50 states and the District of Columbia across 28 key indicators of economic performance and strength. The data set ranges from GDP growth and the unemployment rate to startup activity and the share of jobs in high-tech industries.

Best vs. Worst 

• Louisiana has the highest value of exports per capita, which is 54.9 times higher than in Hawaii, the state with the lowest.
   
• New Hampshire has the lowest share of the population living in poverty, which is 2.6 times lower than in Mississippi, the state with the highest. 
   
• Vermont has the lowest foreclosure rate, which is 14.5 times lower than in District of Columbia, the state with the highest. 
   
• Massachusetts has the highest share of jobs in high-tech industries, which is four times higher than in Arkansas, the state with the lowest. 
   
• North Dakota has the lowest unemployment rate, which is 2.8 times lower than in Nevada, the state with the highest.

View the full report and your state or the District’s rank

“A strong state economy doesn’t guarantee success for the state’s residents, but it certainly makes financial success more attainable. Factors like a low unemployment rate and high average income help residents purchase property, pay down debt and save for the future. The best state economies also encourage growth by being friendly to new businesses and investing in new technology that will help the state deal with future challenges and become more efficient.”
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“Washington has the best state economy in the country, and it has an extremely high amount of industry R&D investment per capita, with the second-highest share of jobs in high-tech industries and the second highest share of Science, Technology, Engineering & Math professionals. In addition, Washington has the fourth-highest percentage of firms that are listed on the Technology Fast 500 list and the sixth-highest median household income after adjusting for the cost of living.”

– Cassandra Happe, WalletHub Analyst

Expert Commentary

What can states do to prevent “brain drain” and develop, attract, and retain highly skilled workers?

“Probably the number one consideration for firms is the workforce. Are there enough quality workers? Will you be able to attract quality workers? Will there be jobs for workers’ spouses and schools for their children? Without a workforce, the rest of the questions are moot. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a ‘race to the bottom’ across states? When it comes to tax incentives, these can be a good deal for firms and a bad deal for localities. It is common for firms to pit locales against each other and negotiate a deal that only benefits the firm. It is called the winner’s curse. Sometimes these deals go to firms that are already in your location and plan to stay. Other times they go to large politically connected firms at the expense of small entrepreneurial firms. Instead of focusing on special tax incentives for a few firms, cities and states should focus on low transparent taxes. It is better to have low taxes on a broad base of firms than high taxes on only a few firms.”
Dr. David Mitchell – Distinguished Professor; Director of the Institute for the Study of Political Economy, Ball State University

“Follow Adam Smith’s dictum. For-profit businesses gravitate toward places with higher levels of economic freedom, especially when they have assurances that it will be maintained for the long-term. Economic freedom applies to education, K thru Ph.D., too. Allow charter and private schools to thrive and don’t create competitive barriers. Educators will then have incentives to help students to learn as quickly and easily as possible. Occupational freedom is increasingly important. Some states have very stringent occupational licensing requirements for occupations that do not really require it, except to protect incumbents from competition. Most occupational licensing simply raises prices for consumers while reducing employment opportunities for poorer people, rendering them unjust in Smithian terms.”
Robert E. Wright, Ph.D. – Lecturer, Central Michigan University

What are the most effective ways for state and local officials to help their local economies?

“Peace, easy taxes, and a tolerable administration of justice. That’s what Adam Smith told his students in the 1750s and it holds to this day. To keep the peace means to not allow looting, rioting, or protests that block commerce, or sleep. Easy taxes are not just low, they are payable at known times and places and in convenient forms. They are also predictable and not arbitrary or politically motivated. Justice can never be perfect but, like taxes, should be meted out in predictable ways not poisoned by animus towards any particular person or group. Researchers have reduced these characteristics to a single concept called ‘economic freedom.”
Robert E. Wright, Ph.D. – Lecturer, Central Michigan University

Where is the economy heading in 2024?

“It’s difficult to say as indicators are all over the place and it isn’t clear that all the data is of high quality. Ultimately, I don’t think it matters because the long-term outlook is fraught so long as the U.S. federal government continues to engage in endless war, hard taxes, and an intolerable administration of justice that favors some groups over others. There is little indication that the election in November will rectify matters, no matter its outcome.”
Robert E. Wright, Ph.D. – Lecturer, Central Michigan University