Survey says: Wisconsin’s economy among the worst in nation

The administration of Gov. Tony Evers likes to tout what he calls a robust Wisconsin economy, featuring lower-than-national-average unemployment and higher-than-national-average labor force participation rates, but a new study from the personal finance company WalletHub actually puts the state’s economy near the bottom of the pile.

Specifically, Wisconsin ranks 40th out of 50 states and the District of Columbia.

The survey measured the best and worst economies in the nation by comparing them across 28 key indicators of economic performance and strength. The data set includes an analysis of GDP growth and the unemployment rate, as well as startup activity and the share of jobs in high-tech industries, among the other factors.

Cassandra Happe, a WalletHub analyst, said a strong state economy doesn’t guarantee success for the state’s residents, but it certainly makes financial success more attainable. 

“Factors like a low unemployment rate and high average income help residents purchase property, pay down debt and save for the future,” Happe said. “The best state economies also encourage growth by being friendly to new businesses and investing in new technology that will help the state deal with future challenges and become more efficient.”

So how did Wisconsin fare? Not too well in many categories. 

In fact, Wisconsin ranked dead last in economic activity. That category measured change in GDP over the previous year; the state’s share of fast-growing firms; the state gross public debt as percent of GDP; exports per capita; and start-up activity. 

The Badger state ranked somewhat better in the economic health category but was still just in the middle of the pack at 31. The factors in calculating economic health were numerous, including such things as the under-employment rate in addition to the unemployment rate; the change in non-farm payrolls year over year; the increase in the ratio of full-time jobs to part-time jobs; median household income adjusted for cost of living; and, not least, the foreclosure rate, building-permit activity, and the growth in the number of businesses.

The state performed best in the third category ranked, that of innovation potential, but there too Wisconsin failed to crack the top 20, coming in at 21. Innovation potential measures the share of jobs in high-tech industries; independent inventor patents per 1,000 working-age population; and entrepreneurial activity.

A couple of items stood out for Wisconsin. One is that it ranked 50th — next to last, beating only Joe Biden’s Delaware — in year-over-year change in GDP. Second, Wisconsin’s start-up rate was among the worst in the country.

Still, Evers painted a far rosier picture recently when he announced record high employment for the state.

“Over the last five years, we’ve been making smart, strategic investments to strengthen our state’s workforce, and folks, the numbers are in — our efforts are paying off,” he said. “Whether it’s the newly announced record-high number of Wisconsinites employed, our high labor force participation, or our historically low unemployment, this is amazing news for our state. And in the Year of the Worker, we’re going to keep building on this progress to make sure our workforce is prepared to meet the needs of a 21st-century economy.”

Making them tick

So who were the best states and who were the absolute worst?

Well the worst were, starting at number 51 and working to number 46: Mississippi, Hawaii, West Virginia, Arkansas, Louisiana, and, somewhat surprisingly, Kentucky.

The best, starting at number 1 and working down to number 5, were Washington state, Utah, Massachusetts, Texas and California.

The WalletHub survey took a look at what the most successful states were doing right.

Washington state, for example, boasted an extremely high amount of industry R&D investment per capita, which WalletHub said allowed it to be at the forefront of new tech. 

“In fact, Washington has the second-highest share of jobs in high-tech industries and the second-highest share of STEM (Science, Technology, Engineering & Math) professionals,” WalletHub writer Adam McCann wrote. “In addition, Washington has the fourth-highest percentage of firms that are listed on the Technology Fast 500 list, and the third-highest number of invention patents per capita.”

In addition, McCann continued, new immigrants to the state were the fifth-most educated in the country, and the state had the sixth-highest median household income after adjusting for the cost of living.

As for Utah, the nation’s second-best state economy, the survey found a high median annual inflation-adjusted household income, second in the nation at almost $84,000. The average income in the state also grew 6.8 percent between 2022 and 2023.

McCann also wrote that the Utah labor market in Utah was healthy, with one of the lowest unemployment rates in the country, at 2.8 percent, along with the second-most growth in the civilian labor force between 2022 and 2023. It should be noted that, at 2.9 percent, Wisconsin’s unemployment rate is right there with Utah and is one of the state’s bright spots.

That’s where the comparisons ended, according to the WalletHub survey. Utah had fifth-highest growth rate in the number of businesses and the sixth-highest share of jobs in high-tech industries.

Massachusetts gets its third-best ranking primarily by pouring more money comparatively into industry and academic R&D. As a result, the state had the second-most invention patents per capita and the highest share of jobs in high-tech industries and the third-highest share of STEM professionals.

In addition, McCann stated, Massachusetts had only a 3 percent unemployment rate, and it had the second-highest percentage of firms that were listed on the Technology Fast 500 list.

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.