Study Ranks Wisconsin’s Economy 28th
With low rankings for “economic activity” and business startups, new analysis finds.
Gov. Scott Walker. Photo from the State of Wisconsin.
Wallet Hub’s latest analysis ranks the economies of all 50 states and the District of Columbia and finds Wisconsin is below average. Wisconsin ranked 28th, but ranked just 38th in “economic activity,” a category that included such factors as business start-up activity, where Wisconsin was tied for 46th place. Wisconsin has regularly ranked at or near the bottom in other studies ranking start-up activity.
Wallet Hub notes that 2015 was “a banner year for the U.S. economy, thanks to a strong dollar, job gains, lower oil prices, increased consumer spending, and general improvements in the housing and business sectors…But within the U.S., state economies could still be either boom or bust.”
To rank the nation’s best and worst economies, Wallet Hub crunched the numbers on 23 different factors, from the unemployment rate to changes in non-farm payroll, percentage of jobs in high-tech industries to patents per 1000 working-age residents, median annual household income to percentage of population lacking health insurance. It then created a data portrait of each state’s economy.
The results in some ways, aren’t a surprise, with the east and west coasts, bulwarks of the nation’s high tech economy, ranking high: Washington ranked second, California third, Massachusetts fourth. Nor were the worst states a surprise: Mississippi (51st), Arkansas (50th) and West Virginia (49th) ranked as having the nation’s worst economy. But the number-one-ranked state was Utah, which may surprise many. Utah ranked first in patents, third in business start-up activity, fourth in immigration of U.S. knowledge workers and fifth in venture capital funding per capita. Forbes recently declared Utah the “new gold standard” for a state economy.
As for Wisconsin, it ranked high (5th) in general economic health, but low (30th) in “innovation potential” and even lower (38th) in “economic activity.” Wisconsin continues to do poorly in any sort of analysis of states’ ability to build a new economy. These rankings predate the tenure of Gov. Scott Walker, but his main strategy of growing the state’s economy through lower taxes seems inadequate, to judge by the seven experts assembled by Wallet Hub, who tended to emphasize the importance of state’s investing in K-12 education, universities and university research, roads and infrastructure.
The analysis found huge differences from state to state in various categories:
-Washington has the highest value of exports per capita, $12,517, which is nine times higher than in Hawaii, the state with the lowest, $1,361.
-South Dakota has the lowest unemployment rate, 2.5 percent, three times lower than in Alaska, the state with the highest, 6.6 percent.
-Massachusetts has the lowest percentage of uninsured population, 3.8 percent, which is six times lower than in Texas, the state with the highest, 21.9 percent.
-New Hampshire has the lowest percentage of residents living below poverty level, 8.9 percent, which is three times lower than in Mississippi, the state with the highest, 22.6 percent.
-Alaska has the lowest foreclosure rate, 0.3 percent, which is 13 times lower than in New Jersey, the state with the highest, 4 percent.
-The District of Columbia has the highest immigration of U.S. knowledge workers, which is 1.5 times higher than in New Mexico, the state with the lowest.
-Massachusetts has the highest percentage of jobs in high-tech industries, 7.94 percent, which is three times higher than in Wyoming, the state with the lowest, 2.32 percent.
-Utah has the highest number of independent-inventor patents per 1,000 working-age residents, 0.188, which is eight times higher than in Mississippi, the state with the lowest, 0.024.
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Why does the state rank so poorly for startups? I know there are organizations in Milwaukee and Madison devoted to supporting them at all phases. We have so many college students and smart young people in those cities. The state is open for business, so why are startups so hard to come by?
I have a love of my home state. Always thought it was better than this ranking. I live in California now and would love to move back because of the high cost here but opportunity is limited and it seems it is very risk averse and the state lives on beating themselves up and non welcoming of new ideas and businesses from out of state. Every new approach is a drama and politicized. The reliance on large companies to serve the state is an achilles heal of policy. I truly believe its not a tax problem but rather a problem with politics at this stage and making the state welcoming of risk and new ideas. Small start ups can’t donate to the parties like the big companies that eventually move to mexico or overseas. The demographics are also a problem. Most of our best talent and investors move out of state for better pay and jobs. Its a toxic environment brought upon by culture, politics, and intolerance. With so many great universities this should be an outrage but the government would rather spend its time regulating personal behavior and do nothing to encourage to grow and transition the economy of Wisconsin Makes you wonder if any of those politicians in WI every had a real job or care about anything other than controlling elections. There is no excuse for this and they can;t blame Obama since other states are doing much better under the same president.
I’d assume most of our local local kids are adverse to risk (thank midwest mentality) or are from out of state and return home once they wrap up their education.
The other problem is that the state relies on low paying jobs and manufacturing nobs that are concentrated and controlled by less than 50 companies worldwide too much. Food and beverage companies, insurance, paper, are concentrated in a select fortune 500 companies as are electronics are concentrated in a select group. Fabricated metals which is a large segment of manufacturing in Wisconsin are smaller but wont be a major growth factor. The state should encourage modernization and tech talent to focus on SaaS software companies, health management, internet of things, The more traditional markets grow at an anemic rate of 2 to 5% a year but the state pours more into subsidies for them by far than any other group. It no wonder why college grads leave the state. I don’t think local or state officials are open to this change and need to evolve to focus on jobs vs personal political bills and being the moral police. Good luck Wisconsin. The trend is only to go further down unless the supposed party of business focuses on business again.
Minnesota is a much better example. If I were to move back to the midwest..I would likely only consider the twin cities since its very progressive and cosmopolitan. The reality is that millennials who are larger population of the workforce more than boomers will gravitate to knowledge centers that are vibrant and tolerant of new ideas. Retaining and attracting a workforce and diversity should be WI number one priority to reverse the current trend.
One other interesting face…WI ranks 48th in terms of attracting new immigrants who tend to start up new businesses at a much faster rate . Also ranks on the bottom of diversity. Demographics and culture play a big part in the result it would seem.
Tom- I was thinking the same thing but didn’t have any stats. Economies do better when there are more immigrants. These are dreamers and risk takers….the sort of people that will start a company and work hard at it.
Minnesota is barely ahead of Wisconsin in these rankings, for what that’s worth: http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2015/05/kauffman_index_startup_activity_state_trends_2015.pdf
The lack of entrepreneurship isn’t surprise. The Walker/WisGOP economic policy has been built on giveaways to established businesses and other campaign contributors. In fact, they want to take away $8 million in state money for startups, and give it to WEDC for the same “job creator” tax credits that already have millions of dollars unaccounted for.
People with talent see how closed off the inner circle is in Wisconsin business, combined with the de-investment with education and quality of life, and choose to go elsewhere. And that won’t change until we change the leaders of both our politics, and the oligarchs in the business community that fund their campaigns
Gallup has reported that this is the third straight year that we have lost more small businesses in this country than have created. Dodd Frank, EPA, Obamacare . Regulations are killing the life blood of America…small businesses are Dead.
Jason- Take the ridiculous Bagger talking points elsewhere, kid. Wisconsin trails most every other state in startups, and all Midwestern state in jobs added the last 4+ years. That’s on Walker.
So let me get this straight. What Bruce Murphy is dishing up is not Bagger talking points. People on food stamps in USA is up. People in the work force as worker participation down, black unemployment up. .Workers earned income down.
@Jason – National economic trends would not explain why Wisconsin lags relative to other states, though. And over what time periods are you referring to when you mention various rates (labor force participation, unemployment, etc) rising or falling?
Jason appears to be one of those fact resistant, historically ignorant individuals who have rallied around Trump. Jason, a little research will indicate that the second greatest financial collapse in the history of this nation was caused by the same government policies as the first: a refusal to regulate the self destructive greed of unbridled capitalism. G. W. Bush, like Coolidge, and Hoover, believed that regulations impeded economic progress. How did that work out?. We need even greater controls now that wealth and governmental power is controlled by an increasingly small minority.
Good luck controlling Capitalism. See Venezuala, Cuba or North Korea. I have always found it interesting how the unionist and bureacrat despises the Capitalist. How much must you steal to make yourselves feel whole. Why not just imprison the one percent like they do in other countries. If I am a Trumpist than you must be a Putinist.
Low rankings on new business starts in Wisconsin has been a problem for several years, well before Walker became governor. It would be informative how long we have been ranked so low in this category- we need some journalism here!
The statements by some of the people in this comment section that Wisconsin is not welcoming to new comers or is intolerant is not consistent with the attitude in Madison, Milwaukee metro, and most parts of the state I have done business in. I think the reason for the consistently low rank in business starts is partly due to people in Wisconsin being economically conservative with respect to their personal finances (not left or right politically). This economic conservatism may general fewer risk takers and make low-level start-up capital more difficult to obtain from friends and family. In addition, the former dominance in our economy of relatively easy to obtain well-paid manufacturing jobs is not a breeding ground for generational entrepreneurs. Finally, the Wisconsin attitude that business failure is shameful (I think this is changing), doesn’t encourage people to risk starting a new business.
Wow, the most red state in the country is the gold standard for a state economy. Conservative, religious. Also highly educated. If you believed the media, you’d think those educated and religious were mutually exclusive. Businesses are leaving west coast liberal states hostile to business and moving to more business-friendly states like Utah.
But liberals will find something else to attribute this to, since it doesn’t fit their narrative.
You are wrong Reason. Utah is an exception. http://www.nytimes.com/2016/07/31/opinion/campaign-stops/the-path-to-prosperity-is-blue.html?_r=0
“HOW can America’s leaders foster broad prosperity? For most Republicans — including Donald J. Trump — the main answer is to “cut and extract”: Cut taxes and business regulations, including pesky restrictions on the extraction of natural resources, and the economy will boom.
Mr. Trump and House Speaker Paul Ryan are united by the conviction that cutting taxes — especially on corporations and the wealthy — is what drives growth.
A look at the states, however, suggests that they’re wrong. Red states dominated by Republicans embrace cut and extract. Blue states dominated by Democrats do much more to maintain their investments in education, infrastructure, urban quality of life and human services — investments typically financed through more progressive state and local taxes. And despite what you may have heard, blue states are generally doing better.”