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Study: Vermont in middle of pack for state economies

Submitted by tim on

Vermont Business Magazine The states with the most robust economies are tending to be on the coasts, while the interior of the US states are growing more slowly. Vermont ranks 26th. On the top five "best" and "worst" subcategories, it is in only one, ranking second best in educational attainment of newcomers. Other states have seen a tremendous rebound from the Great Recession. California, for instance, blossomed in 2016 as the sixth largest economy in the world, boasting a GDP that’s comparable in size to the UK’s and even larger than those of France and India. Meanwhile, Illinois continues to be in a fiscal free fall, with a record $14.5 billion in unpaid debt — imperiling its schools and social programs — as well as the second-highest unemployment rate in the Midwest.

Vermont, with the second lowest population to Wyoming ($37,858 million), has the smallest GDP at $31,092 million. Vermont is tied for 8th lowest unemployment rate at 3.1 percent.

In order to determine which states are pulling the most weight, WalletHub’s analysts compared the 50 states and the District of Columbia across 27 key indicators of economic performance and strength. WalletHub's data set ranges from GDP growth to startup activity to share of jobs in high-tech industries. Artwork-2017-States-with-the-Best & Worst Performing Economies-v2

Methodology

Source: WalletHub

Best State Economies

Overall Rank
(1 = Best)

State

Total Score

‘Economic Activity’ Rank

‘Economic Health’ Rank

‘Innovation Potential’ Rank
1 Washington 76.54 1 4 3
2 California 73.78 2 26 2
3 Utah 73.77 5 1 4
4 Massachusetts 73.34 4 29 1
5 District of Columbia 67.09 3 6 13
6 Colorado 66.37 15 3 5
7 Oregon 65.65 6 9 10
8 New Hampshire 62.52 17 10 7
9 Maryland 60.97 18 28 6
10 Delaware 59.82 10 20 15
11 Idaho 58.20 21 2 19
12 Michigan 57.86 23 33 8
13 Virginia 57.51 9 18 23
14 Arizona 57.35 16 24 14
15 North Carolina 57.34 24 11 12
16 Connecticut 57.25 12 45 9
17 Minnesota 56.56 20 16 17
18 Georgia 55.99 8 21 29
19 New York 55.66 7 44 18
20 Texas 55.40 19 15 21
21 New Jersey 55.13 11 47 11
22 Florida 54.48 13 12 30
23 Missouri 50.17 34 19 24
24 South Carolina 49.78 14 23 41
25 Wisconsin 49.16 33 14 31
26 Vermont 49.10 35 31 22
27 Nebraska 49.00 36 7 34
28 Indiana 48.89 26 25 35
29 Nevada 48.11 22 27 40
30 Pennsylvania 47.73 25 41 27
31 Montana 47.66 46 13 25
32 South Dakota 47.09 39 5 39
33 Iowa 47.01 31 22 37
34 Illinois 46.93 27 43 26
35 Tennessee 46.40 29 17 44
36 Rhode Island 46.02 40 40 20
37 Ohio 45.67 30 42 28
38 Kansas 44.25 43 34 32
39 Hawaii 43.71 38 30 38
40 New Mexico 42.08 44 51 16
41 Alabama 41.58 32 38 43
42 North Dakota 41.11 51 8 36
43 Wyoming 39.40 47 32 45
44 Kentucky 38.94 28 46 48
45 Maine 38.91 37 36 47
46 Alaska 37.68 50 39 33
47 Oklahoma 37.11 49 37 42
48 Arkansas 35.88 45 35 50
49 Mississippi 34.99 41 48 46
50 Louisiana 33.22 42 50 49
51 West Virginia 28.14 48 49 51

In order to determine the best state economies, WalletHub’s analysts compared the 50 states and the District of Columbia across three key dimensions: 1) Economic Activity, 2) Economic Health and 3) Innovation Potential.

We evaluated those dimensions using 27 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest economic performance.

We then calculated the total score for each state and the District based on its weighted average across all metrics and used the resulting scores to construct our final ranking.

Economic Activity – Total Points: 33.33
  • GDP Growth: Quadruple Weight (~13.33 Points)
  • Share of Fast-Growing Firms: Triple Weight (~10.00 Points)
    Note: This metric measures the number of firms in Deloitte’s Technology Fast 500 list as a percentage of total firms.
  • Exports per Capita: Full Weight (~3.33 Points)
  • Startup Activity: Full Weight (~3.33 Points)
    Note: This metric measures the rate of newly established firms.
  • Quality of Legal System: Full Weight (~3.33 Points)
Economic Health – Total Points: 33.33
  • Unemployment Rate: Double Weight (~4.60 Points)
  • Underemployment Rate: Half Weight (~1.15 Points)
  • Change in Nonfarm Payrolls (2016 vs. 2015): Full Weight (~2.30 Points)
  • Change in Total Civilian Labor Force (2016 vs. 2015): Full Weight (~2.30 Points)
  • Increase in Ratio of Full-Time Jobs to Part-Time Jobs (2015 vs. 2014): Half Weight (~1.15 Points)
  • Median Annual Household Income: Full Weight (~2.30 Points)
  • Government Surplus/Deficit per Capita: Full Weight (~2.30 Points)
  • Unfunded Public Pension Plans per Capita: Full Weight (~2.30 Points)
  • Share of Population Lacking Health Insurance: Half Weight (~1.15 Points)
  • Share of Population Living Below Poverty Level: Full Weight (~2.30 Points)
  • Foreclosure Rate: Full Weight (~2.30 Points)
  • Growth in Number of Businesses (2015 vs. 2014): Full Weight (~2.30 Points)
  • Fiscal Health: Full Weight (~2.30 Points)
    Note: This metric is based on the George Mason University Mercatus Center’s state fiscal rankings, particularly the State Fiscal Condition Index, which refers to the sum of cash, budget, long-run, service-level and trust-fund solvency indices for each state.
  • Building-Permit Activity: Full Weight (~2.30 Points)
    Note: This metric measures the total number of new privately owned residential-building permits issued annually per capita.
  • Average Educational Attainment of Recent Migrants from Abroad: Half Weight (~1.15 Points)
    Note: The educational attainment of recent immigrants aged 25 and older from a foreign country is classified as having either no high school diploma; a high school diploma or equivalent; some college experience or an associate’s degree; a bachelor’s degree; or a graduate or professional degree. Each degree classification was assigned a weight based on the equivalent average years of schooling the U.S. education system would require for the level of educational attainment:
    • 0 for no high school diploma;
    • 12 for high school diploma or equivalent;
    • 14 for some college experience or an associate’s degree;
    • 16 for a bachelor’s degree; and
    • 18.95 for a graduate or professional degree (the average number of years of schooling of the U.S. population of graduate, professional, and doctorate degree holders)

    The number of recent immigrants in each degree classification was multiplied by its respective weight then divided by the total number of recent immigrants aged 25 and older for the final score.

  • Average Educational Attainment of Recent Migrants from Other U.S. States: Half Weight (~1.15 Points)
    Note: The educational attainment of recent migrants aged 25 and older from other states within the U.S. is classified as having either no high school diploma; a high school diploma or equivalent; some college experience or an associate’s degree; a bachelor’s degree; or a graduate or professional degree. Each degree classification was assigned a weight based on the equivalent average years of schooling the U.S. education system would require for the level of educational attainment:
    • 0 for no high school diploma;
    • 12 for high school diploma or equivalent;
    • 14 for some college experience or an associate’s degree;
    • 16 for a bachelor’s degree; and
    • 18.95 for a graduate or professional degree (the average number of years of schooling of the U.S. population of graduate, professional, and doctorate degree holders)

    The number of recent immigrants in each degree classification was multiplied by its respective weight then divided by the total number of recent migrants aged 25 and older for the final score.

Innovation Potential – Total Points: 33.33
  • Share of Jobs in High-Tech Industries: Full Weight (~5.56 Points)
  • Share of Jobs STEM Professionals: Full Weight (~5.56 Points)
  • Number of Independent Inventor Patents per 1,000 Working-Age Population: Full Weight (~5.56 Points)
  • Industry R&D Investment Amount per Total Civilian Employed Population: Full Weight (~5.56 Points)
    Note: “R&D” refers to research and development.
  • Nonindustry R&D Investment Amount as Share of GDP: Full Weight (~5.56 Points)
    Note: “R&D” refers to research and development.
  • Entrepreneurial Activity: Full Weight (~5.56 Points)
    Note: This metric is based on the Kauffman Index of Startup Activity, which is an equally weighted index of three normalized measures of startup activity, as defined by the Kauffman Foundation: the Rate of New Entrepreneurs (percentage of adults becoming entrepreneurs in a given month); the Opportunity Share of New Entrepreneurs (percentage of new entrepreneurs driven primarily by “opportunity” vs. “necessity”); and the Startup Density of a Region (number of new employer businesses, normalized by the business population).

Sources: WalletHub June 2017. Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, Deloitte, U.S. Chamber Institute for Legal Reform, United Health Foundation, American Legislative Exchange Council, Mercatus Center at George Mason University, CoreLogic, United States Patent and Trademark Office, National Science Foundation and Ewing Marion Kauffman Foundation.