The 25 Slowest-Growing State Economies in America

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A decade after the Great Recession, employment numbers remain strong and seemingly show no signs of a slowdown heading into a presidential election year.

Metro areas like Boston, Seattle and San Francisco are among those in the U.S. that continue to drive their local economies with ongoing tech booms.

Unfortunately, the good times aren’t universal. Many state economies, especially in the South and Northeast, are languishing for myriad reasons: demographic shifts, aging populations and fading industries among them.

A recent WalletHub analysis scored and ranked every state based on 28 key indicators of economic activity, economic health and innovation potential.

We’ve taken a look at the 25 states that have the slowest economies according to WalletHub’s analysis, starting with those in the middle of the pack and ending with the states that have the very worst economies.

For a look at the states with the strongest economies, check out “The 25 Hottest State Economies in America.”

26. Connecticut

fadedphotoshop / Shutterstock.com

State’s total score: 42.66 out of 100

WalletHub’s analysis ranks Connecticut No. 49 in terms of economic health but No. 6 for innovation potential.

The Constitution State is one of only three states with a workforce that has contracted since before the Great Recession began in December 2007, the Hartford Courant reports. That’s despite the state having a June unemployment rate of 3.7%, which matches that of the nation overall.

27. Indiana

PhilipR / Shutterstock.com

State’s total score: 42.58 out of 100

Money Talks News recently reported that Hoosier State taxes are especially hard on low-income residents, citing a separate WalletHub analysis.

For workers earning $25,000 per year, the total state tax burden is 11.82% of their income — the fifth-highest such rate among the nation’s 50 states. That level of tax burden is primarily due to Indiana’s 7% sales tax rate, which is also one of the highest in the country.

28. Iowa

Doug Lambert / Shutterstock.com

State’s total score: 42.41 out of 100

The Hawkeye State’s cost of living is the 13th-lowest in the country, according to the Missouri Economic Research and Information Center. And the state had a 2.4% unemployment rate as of June — much lower than the national unemployment rate of 3.7% for the same period.

Some other good news for Iowa is that workers’ hourly wages have increased 3.6% over the past year, higher than the increase for workers nationally of 3.1% over the same 12-month period, according to the June report of the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas.

29. North Dakota

Fargo, North Dakota
David Harmantas / Shutterstock.com

State’s total score: 42.01 out of 100

The Creighton University Mid-America Business Conditions Index of nine states signals that economic growth for the region (and for the country, too) is likely to keep slowing in 2019-2020. The index dropped to 52.0 in July, the lowest number in three years.

Perhaps the North Dakota economy will be helped by the state legislature’s decision to allow shopping on Sunday mornings, making the Peace Garden State the last of the 50 states to designate Sunday a full shopping day like any other. In 1991, North Dakota became the last state to allow some shopping on Sundays, but businesses could not open their doors before afternoon.

30. Kansas

People in Kansas looking at large pumpkin
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State’s total score: 41.74 out of 100

The Rural Opportunity Zones (ROZ) program in Kansas offers financial incentives for people to move to one of 77 counties participating in the program. Those carrots include up to $15,000 in student loan repayments and state income tax waivers, both over a five-year period.

And maybe it’s not a bad idea to set up shop in the Jayhawk State. CNBC rated the state as the 19th best for business in 2019, a big jump from its 35th-place ranking in 2018.

31. Nebraska

Harvest in Nebraska
Weldon Schloneger / Shutterstock.com

State’s total score: 41.36 out of 100

A panel of state government, private sector, agricultural, education and civic leaders this summer delivered the Blueprint Nebraska report, a long-range strategic plan for the state’s economic growth and competitiveness. Its ambitious goals include achieving 25,000 more jobs and a $15,000 increase in median income by 2030.

But there are big obstacles. The Blueprint Nebraska report notes that the state ranked 36th in university STEM graduates in 2017. It also found the state is also having difficulty keeping and attracting young workers — Nebraska ranked 39th in the U.S. with a 0.5% population growth rate for 25- to 29-year-olds from 2013-2018.

32. Illinois

Kristopher Kettner / Shutterstock.com

State’s total score: 39.06 out of 100

The Land of Lincoln takes a big bite out of residents’ incomes, especially those for whom money is tight, as Money Talks News previously reported.

For low-income households, Illinois’ total tax burden is the second-highest in the country at about 13%.

However, employment prospects are bright. The Illinois Department of Employment Security says the state has added 94,700 jobs since June 2018.

33. South Carolina

Matt A. Claiborne / Shutterstock.com

State’s total score: 39.02 out of 100

Gun violence costs South Carolina taxpayers more than $1.5 billion per year from lost wages, employer expenses and costs for health care, law enforcement and criminal justice, according to the Giffords Law Center.

The Palmetto State has the 12th-highest rate of gun deaths in the U.S., the center says.

The bleak data is worse for African-American males, who comprise 27% of the state’s population but are two-thirds of all gun homicide victims.

34. Alabama

African American grandfather and kids on ride at the fair, Alabama
JNix / Shutterstock.com

State’s total score: 38.87 out of 100

The Heart of Dixie is the fifth-worst state to raise a family, according to another WalletHub study. Alabama has the nation’s highest infant mortality rate, and 46% of families live in poverty, MoneyTalksNews reports.

However, Business Facilities magazine recently ranked Alabama No. 3 for best business climate and No. 5 for economic growth potential.

35. Ohio

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State’s total score: 38.84 out of 100

The opioid crisis has hit the Buckeye State hard. About 5,000 people die here from overdoses annually and the epidemic is costing the state between $4 billion and $5 billion each year, CNBC reports.

On a brighter note, Toledo is the No. 1 city in the U.S. for having the most high-paying jobs for workers without degrees, as Money Talks News reported earlier this year.

36. Vermont

Burlington, Vermont
Erika J Mitchell / Shutterstock.com

State’s total score: 38.57 out of 100

Vermont’s population is in decline and could keep declining for two more decades, according to demographers’ projections.

In a bid to reverse the trend, the Green Mountain State’s Remote Worker Grant Program pays professionals to move there, as Money Talks News reports. Those who qualify receive a $5,000 grant to cover certain expenses.

Although Vermont’s population isn’t growing, the local food industry is. Specialty food manufacturers drove a 50% growth in the industry from 2006 to 2016.

37. Montana

Men on horses in mountains
outdoorsman / Shutterstock.com

State’s total score: 38.39 out of 100

Big Sky Country faces challenges replacing its aging workforce. Montana has the oldest population in the West, and its rural communities are losing population and businesses.

However, some areas in Montana — such as the home counties of Bozeman, Missoula and Billings — are adding people, thanks to out-of-state transplants lured by the state’s natural beauty and outdoor recreation.

38. Oklahoma

Nick Fox / Shutterstock.com

State’s total score: 35.97 out of 100

Native American tribes contributed nearly $13 billion to the Oklahoma economy in 2017, according to a report by Dr. Kyle Dean, director of the Center for Native American and Urban Studies at Oklahoma City University.

The Oklahoma Native Impact Report shows that the tribes support 96,177 jobs, 27,000 miles of highways and roads, and invested $1.5 billion in exclusivity fees for public education and mental health services.

39. South Dakota

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State’s total score: 35.78 out of 100

South Dakota’s economy is among the weakest in the nation. The state’s living wage for a one-person household hovers around $10 per hour, Money Talks News reports.

Agriculture is doing its part. The industry adds nearly $32.5 billion to the state economy annually — about 33% of the state’s total economic output, according to a state study.

40. New Mexico

turtix / Shutterstock.com

State’s total score: 35.41 out of 100

In The Land of Enchantment, the economy is struggling. And that’s hard on families.

New Mexico is ranked by WalletHub as the worst state in the U.S. for raising a family, Money Talks News has previously reported. Violent crime and divorce rates are high, and median family salaries are low.

One bright note is the Los Alamos National Laboratory, which contributes $3 billion annually to the state economy and supports 24,000 direct and indirect jobs, according to the University of New Mexico Bureau of Business and Economic Research.

41. Maine

Maine sorting lobster
WoodysPhotos / Shutterstock.com

State’s total score: 34.42 out of 100

Gov. Janet Mills believes helping asylum-seekers move to the state will boost the Maine economy, which is aging and losing young workers to other states.

“This workforce shortage is one of the most serious long-term issues facing our state,” Mills writes. In one Maine high school, graduating classes have shrunk in size from 54 in 1969 to 18 in 2019.

42. Rhode Island

solepsizm / Shutterstock.com

State’s total score: 33.52 out of 100

The Ocean State was dead last in CNBC’s annual Top States for Business rankings, thanks to aging infrastructure, sluggish economic growth and high costs of doing business.

Unfortunately, it’s familiar territory for Rhode Island — the state has placed last five times in the rankings’ 13 years.

43. Wyoming

Police Wyoming
TheGreenMan/Shutterstock.com

State’s total score: 32.52 out of 100

Coal has propped up the Cowboy State for years, but Wyoming, the nation’s No. 1 coal producer (with 41% of U.S. coal production), is now suffering.

The state’s third- and fourth-largest coal mining companies have gone under in the last few months as cheap natural gas and, to a lesser extent, renewable energy sources have driven down demand for coal.

44. Kentucky

Woman petting horse
Alexey Stiop / Shutterstock.com

State’s total score: 31.74 out of 100

The growth of the hemp industry is helping to bolster the Bluegrass State’s economy as it becomes the nation’s acknowledged leader in industrial hemp growing and production.

Kentucky hemp processors reported a $41 million increase in sales from 2017 to 2018. Under a pilot program, 33 acres were planted in 2014, and that increased to 6,700 in 2018.

The Kentucky Department of Agriculture has approved 57,000 acres for planting hemp this year.

45. Arkansas

Cotton fields in Arkansas
PhotoStock-Israel / Shutterstock.com

State’s total score: 30.17 out of 100

In its annual Top States for Business rankings, CNBC placed the Natural State at No. 42, grading it F for quality of life and for technology and innovation and D-minus for its workforce.

The Mid-America Business Conditions Index, which tracks business and economic trends in the middle of the country, reports that Arkansas’ overall standing fell to 51.0 in July’s survey, from 60.1 in June.

46. West Virginia

David Byron Keener / Shutterstock.com

State’s total score: 28.92 out of 100

The Mountain State is the fourth-worst state for rearing a family, MoneyTalksNews has reported, citing a WalletHub study:

  • West Virginia ranks dead last in the “family fun” category.
  • It has the lowest number of families with young children.

Some good news: West Virginia led the nation in gross domestic product growth, with a 5.2% jump in the first quarter of 2019, according to the U.S. Department of Commerce.

The report cites growth in coal exports and increased natural gas activity due to the construction of large pipelines across the state.

47. Hawaii

travel
Maridav / Shutterstock.com

State’s total score: 28.80 out of 100

You can say, “bye-bye” to a good portion of your income if you live in Hawaii, especially if you’re not a high wage earner. Low-income residents of the Aloha State find nearly 13% of personal income goes to taxes of one sort or another, the third-worst percentage in the nation.

These days islanders also are grousing about the impact of more than 10 million visitors per year on their state, as the influx of tourists pushes the limits of the state’s beaches, hiking trails and towns.

48. Mississippi

RaksyBH / Shutterstock.com

State’s total score: 28.63 out of 100

The Magnolia State is ranked by WalletHub as the second-worst state for rearing a family, MoneyTalksNews has previously reported. A previous WalletHub study placed Mississippi in the bottom 10 states for health and safety, education and child care, affordability and family fun.

CNBC calls the state the third-worst for business, saying, “The state’s workers are the nation’s least productive, and the state has the nation’s lowest concentration of science, technology, engineering and math (STEM) workers.”

49. Louisiana

Joseph Sohm / Shutterstock.com

State’s total score: 28.53 out of 100

The Bayou State is the third-worst for raising a family, says a recent MoneyTalksNews report, citing a study from WalletHub.

The study placed the state second to last in the category of health and safety and third to last for education and child care.

This year did start out well for Louisiana, however, with the state’s gross domestic product rising 3.8% in the first quarter, compared with the national average of 3.1%. Nondurable goods manufacturing, retail trade and mining, quarrying and oil and gas extraction were the most productive industries.

50. Alaska

Michael Rosebrock / Shutterstock.com

State’s total score: 28.49 out of 100

Anchorage economic development experts are worried about the state government’s budget cuts, which they predict will sink the city “back into recession for two to three more years,” the Anchorage Economic Development says in its three-year forecast.

“State agency budget cuts are expected to cost the Alaska economy 4,700 jobs, including 2,000 Anchorage jobs, over the next few years,” the report says.

The dire report comes weeks after Gov. Mike Dunleavy proposed a 40% cut to the University of Alaska budget.

Is your state’s economy at a standstill despite the rosier national picture? What contributes to the problem? Tell us in a comment below or with a post at Money Talks News’ Facebook page.

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