Best State Economies: MA Ranked 3rd

Monday, June 03, 2019

GoLocalWorcester Business Team

New rankings were released on Monday morning scoring the strength of each state’s economy.

Massachusetts ranks 3rd and Rhode Island ranked 43rd.

Most disturbing for Rhode Island is the state ranks 50th for “economic activity.”

And, Rhode Island ranks 48th for growth of GDP.

Rhode Island ranks last in New England.

“U.S. economic growth depends heavily on the performance of individual states. But some contribute more than others. California, for instance, blossomed in 2017 as the fifth largest economy in the world, boasting a GDP larger than that of countries like the U.K., France and India. Meanwhile, Alaska, a state with valuable natural resources, is struggling with the highest unemployment rate in the country, at 6.5%,” reports WalletHub.

“In order to determine which states are pulling the most weight, WalletHub compared the 50 states and the District of Columbia across 28 key indicators of economic performance and strength. Our data set ranges from GDP growth to startup activity to share of jobs in high-tech industries. Read on for our findings, expert insight from a panel of researchers and a full description of our methodology,” said the researchers.

SEE MAP AND METHODOLOGY BELOW

Source: WalletHub

Methodology

In order to determine the best state economies, WalletHub 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 28 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 determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

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.
State Gross Public Debt as Percent of GDP: Full Weight (~3.33 Points)
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.

Economic Health – Total Points: 33.33

Unemployment Rate: Double Weight (~4.30 Points)
Underemployment Rate: Half Weight (~1.08 Points)
Change in Nonfarm Payrolls (2018 vs. 2017): Full Weight (~2.15 Points)
Change in Total Civilian Labor Force (2018 vs. 2017): Full Weight (~2.15 Points)
Increase in Ratio of Full-Time Jobs to Part-Time Jobs (2017 vs. 2016): Half Weight (~1.08 Points)
Median Annual Household Income Adjusted for Cost of Living: Full Weight (~2.15 Points)
Growth in State Personal Income (2018 vs 2017): Full Weight (~2.15 Points)
Government Surplus/Deficit per Capita: Full Weight (~2.15 Points)
Unfunded Public Pension Plans per Capita: Full Weight (~2.15 Points)
Share of Uninsured Population: Half Weight (~1.08 Points)
Share of Population in Poverty: Full Weight (~2.15 Points)
Foreclosure Rate: Full Weight (~2.15 Points)
Growth in Number of Businesses (2016 vs. 2015): Full Weight (~2.15 Points)
Fiscal Health: Full Weight (~2.15 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 (~2.15 Points)
Note: This metric measures the total number of new privately owned residential-building permits issued annually per capita.
Average Educational Attainment of Recent Immigrants: Half Weight (~1.08 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.
Average Educational Attainment of Recent Migrants from Other U.S. States: Half Weight (~1.08 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.

Innovation Potential – Total Points: 33.33

Share of Jobs in High-Tech Industries: Full Weight (~5.56 Points)
Share of STEM Employment: Full Weight (~5.56 Points)
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).