Winning! The states doing the best in the pandemic recovery
Happy Friday! Or as my son’s teacher says, happy Fri-YAY! I’m on vacation so for this week’s issue, I’ve put together a roundup of the “Best and Worst” states in a variety of economic categories. This one’s free for everyone. Enjoy!
The prepandemic jobs recovery
The nation is now just 1 million jobs (0.7%) short of the February 2020 level, reports the Kroll Bond Ratings Agency. But even so, 28 states (including the District of Columbia) have collectively lost 2.8 million jobs since that time. Over the same two-year time frame, the combined labor force for these states was down 2.5 million.
States that have recovered the most jobs
Winning: Indiana and North Carolina are just 0.2% below their Feb. 2020 employment count.
Notable: Kentucky, Missouri and Rhode Island are less than 1% away from recovering their employment count.
Losing: D.C., Maryland and New York are all more than 6% down from their pre-pandemic employment count.
Patterns: The top states all had relatively low unemployment rates to begin with. The bottom states all had higher than average unemployment rates in February 2020.
State and local tax burden
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product, reports the Tax Foundation. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978. The foundation defines a state’s tax burden as state and local taxes paid by a state’s residents divided by that state’s share of net national product. In 2022, state-local tax burdens were estimated at 11.2% of national product.
Winning: Alaska (4.6%), Wyoming (7.5%), and Tennessee (7.6%) had the lowest burdens.
Notable: South Dakota, Michigan, Texas, North Dakota, Georgia and South Carolina all had total burdens in the 8% range.
Losing: New York (15.9%), Connecticut (15.4%) and Hawaii (14.1%) had the highest burdens.
Patterns: Most of the states with the lowest burdens don’t tax individual income or have a flat income tax rate. And nearly all of them are Republican-led. However, this structure also shifts more of the tax burden on sales taxes which places a higher burden on lower-income individuals.
See also: Lowest income households pay the highest share of taxes
States with the most wealthy people
The Federal Funds Information for the States recently analyzed the latest wealth and asset ownership data by state. As the “Rethinking Revenue” series highlighted, individual wealth has shifted over the decades from property—which local governments can tax—to financial assets, which most localities don’t tax. The FFIS looks at both. On the whole, the overwhelming majority of individual wealth is still in property. The median value of household assets ranks as: home equity ($130,000), retirement accounts ($70,000), motor vehicles ($7,000) and financial institutions ($7,000). The data excluded Alaska and Vermont because of small sample sizes.
Winning: Hawaii is by far the top state, with a median household net worth of $373,000. Massachusetts, New Hampshire and North Dakota are the next bunch, all with household net worth around or slightly under $250,000.
Losing: Mississippi households have the lowest median net worth of $40,000, followed by Arkansas ($50,000), New Mexico ($56,000) and West Virginia ($65,000).
BUT: Hawaii’s huge lead is driven by high housing values. Excluding home equity, the Aloha State falls down to the middle of the pack while North Dakota, South Dakota and Minnesota rise to the top with net worth over $100,000. New Hampshire and Massachusetts are still high-ranking and come in fourth and fifth, respectively. The bottom four reorder themselves but remain the nation’s lowest, all with median household net worth under $20,000.
Tell me what you think
Do you have questions for me after reading this? Are there other patterns you see? Comment below or, if you’re reading this in your inbox, respond to this message and let me know.