In which U.S. states is the economic climate bleakest?

To find out, WalletHub compared the states and Washington, D.C., in three key areas: economic activity, economic health, and innovation potential. It identified 23 relevant metrics, ranging from GDP growth, exports per capita and business startup activity to the unemployment rate, the number of residents lacking health insurance, and the unfunded liability of its pension plans.

Add in such additional factors as the foreclosure rate, the median annual household income, the immigration of U.S. knowledge workers, the number of independent-inventor patents, and entrepreneurial activity, and you get a picture of the state's overall economic climate.

States were ranked based on WalletHub's calculation of the overall score for each state using the weighted average across all metrics.

Hawaii

Often touted as paradise—if you can afford its higher-than-average taxes and cost of living—Hawaii came in 10^th from the bottom because, among other things, its economic activity rank placed it at 50^th—while, surprisingly, its export rate per capita was even lower: the lowest in the nation. For economic health, the state ranked 17^th, but for innovation potential it only made 39^th place.

It also ranked 44^th in venture capital funding per capita and 49^th in the percentage of jobs in high-tech industries—although who goes to Hawaii for tech? Unemployment isn't a problem in the state, though; it tied with North Dakota for the fifth-lowest unemployment rate in the country.

Oklahoma

The wind may come sweeping across the plain here, but a 39^th place finish for economic activity isn't great. Neither is a 42^nd place ranking for economic health or a 46^th place ranking for innovation potential.

The state also finished 50^th for exports per capita.

Alabama

Alabama's 37^th place innovation potential outpaced the state's economic activity, at 44^th place, and its 46^th place economic health ranking.

Alabama residents will not be pleased to know that the state ranked 47^th for median annual household income, and 48^th for independent-inventor patents per 1,000 working-age residents.

Kentucky

The Bluegrass State's 30^th place finish for economic activity makes a better showing than its 50^th place ranking for economic health and 45^th place for innovation potential.

Placing 49^th for independent-inventor patents per 1,000 working-age residents isn't exactly a sterling recommendation, either; nor is Kentucky's 48^th place for lowest state-government surplus per capita and for lowest median annual household income.

Louisiana

The Pelican State's economic activity isn't all that bad, at 29^th place, probably thanks in part to its first-place tie with the state of Washington for most exports per capita, but its economic health—at 49^th—and innovation potential—also at 49^th—helped to drag it down.

Louisiana came in at 45^th for venture funding capital per capita, near the bottom, at 48^th, for nonfarm payrolls change. And the state was 49th for state-government surplus per capita and 50^th in immigration of U.S. knowledge workers.

New Mexico

New Mexico's innovation potential was considerably higher, at 15^th place, than either its economic activity—47^th place—or its economic health, at 51^st place.

But in a study in contrasts, it surprisingly comes in second place for the highest percentage of jobs in high-tech industries—yet finishes in 51^st place, with the lowest immigration of U.S. knowledge workers of any state.

Maine

Maine was an outlier, a New England state finishing near the bottom. Its economic activity held it down to 48^th place, while economic health was only 45^th and innovation potential dragged in at 47^th place.

Maine also had the fourth-lowest GDP growth in the country.

West Virginia

West Virginia's economic activity placed 43^rd, while its economic health placed it in 47^th place and its innovation potential was even worse, at 50^th.

Interestingly, its GDP growth placed it at the other end of the scale, in fourth place, while the state finished dead last in business startup activity and tied for 48^th place for its unemployment rate. It placed 49^th for nonfarm payrolls change and for median annual household income, 50^th for the percentage of jobs in high-tech industries, and 49^th for the number of independent-inventor patents per 1,000 working-age residents.

Arkansas

For economic activity, the Natural State was right down near the bottom, at 49^th; economic health was a tad better, at 36^th, but innovation potential was at the very bottom: 51^st place.

The state was 50^th in median annual household income, 48^th when it came to the percentage of jobs in high-tech industries, 50^th for independent-inventor patents per 1,000 working-age residents, and 43^rd in venture capital funding per capita.

Mississippi

The state ranked as having the worst economy in the union was Mississippi, due to its rankings of 51^st in economic activity, 48^th in economic health, and 44^th in innovation potential.

Mississippi also placed 50^th in GDP growth, 47^th in unemployment, 51^st in median annual household income, and 51^st for independent-inventor patents per 1,000.

Instant Insights /

10 States with the Worst Economy

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